FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
|
(Mark One) |
|
|
|
|
||
|
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 No. 1-31946 |
||
HOSPIRA, INC.
|
A Delaware corporation |
|
I.R.S. Employer Identification |
|
|
|
No. 20-0504497 |
275 N. Field Drive
Lake Forest, Illinois 60045
Telephone: (224) 212-2000
Indicate by check mark whether the registrant (l) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of l934 during the preceding l2 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 o. No ý.
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o. No ý.
As of April 30, 2004, Hospira, Inc. had outstanding 156,042,544 common shares, par value $0.01 per share.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Hospira, Inc.
Condensed Combined Statements of Earnings
(Unaudited)
(dollars in thousands)
|
|
|
Three Months Ended March 31 |
|
||||
|
|
|
2004 |
|
2003 |
|
||
|
Net Sales |
|
$ |
575,198 |
|
$ |
571,522 |
|
|
Net Sales to Abbott Laboratories |
|
46,020 |
|
61,589 |
|
||
|
Total Net Sales |
|
621,218 |
|
633,111 |
|
||
|
|
|
|
|
|
|
||
|
Cost of products sold |
|
452,879 |
|
459,413 |
|
||
|
Research and development |
|
24,446 |
|
19,365 |
|
||
|
Selling, general and administrative |
|
57,510 |
|
56,762 |
|
||
|
Total Operating Costs and Expenses |
|
534,835 |
|
535,540 |
|
||
|
|
|
|
|
|
|
||
|
Operating Earnings |
|
86,383 |
|
97,571 |
|
||
|
|
|
|
|
|
|
||
|
Other expense, net |
|
868 |
|
2,365 |
|
||
|
Earnings Before Taxes |
|
85,515 |
|
95,206 |
|
||
|
|
|
|
|
|
|
||
|
Taxes on earnings |
|
20,524 |
|
28,086 |
|
||
|
Net Earnings |
|
$ |
64,991 |
|
$ |
67,120 |
|
The accompanying notes are an integral part of these condensed combined financial statements.
2
Hospira, Inc.
Condensed Combined Statements of Cash Flows
(Unaudited)
(dollars in thousands)
|
|
|
Three Months Ended March 31 |
|
||||
|
|
|
2004 |
|
2003 |
|
||
|
Cash Flow From (Used in) Operating Activities: |
|
|
|
|
|
||
|
Net earnings |
|
$ |
64,991 |
|
$ |
67,120 |
|
|
Adjustments to reconcile net earnings to net cash from operating activities - |
|
|
|
|
|
||
|
Depreciation |
|
37,035 |
|
37,436 |
|
||
|
Amortization of intangibles |
|
1,091 |
|
1,145 |
|
||
|
Trade receivables |
|
(24,072 |
) |
332 |
|
||
|
Inventories |
|
(22,906 |
) |
(41,492 |
) |
||
|
Prepaid expenses and other assets |
|
(1,403 |
) |
(10,357 |
) |
||
|
Trade accounts payable and other liabilities |
|
20,830 |
|
(21,254 |
) |
||
|
Other, net |
|
(3,288 |
) |
(24,134 |
) |
||
|
Net Cash From Operating Activities |
|
72,278 |
|
8,796 |
|
||
|
|
|
|
|
|
|
||
|
Cash Flow (Used in) Investing Activities: |
|
|
|
|
|
||
|
Acquisitions of property and equipment |
|
(59,088 |
) |
(48,768 |
) |
||
|
|
|
|
|
|
|
||
|
Cash Flow From (Used in) Operating and Investing Activities |
|
13,190 |
|
(39,972 |
) |
||
|
|
|
|
|
|
|
||
|
Cash Flow (Used in) From Financing Activities: |
|
|
|
|
|
||
|
Net transactions with Abbott Laboratories |
|
(13,177 |
) |
39,876 |
|
||
|
|
|
|
|
|
|
||
|
Effect of exchange rate changes on cash and cash equivalents |
|
(13 |
) |
96 |
|
||
|
|
|
|
|
|
|
||
|
Net Change in Cash and Cash Equivalents |
|
$ |
— |
|
$ |
— |
|
The accompanying notes are an integral part of these condensed combined financial statements.
3
Hospira, Inc.
Condensed Combined Balance Sheets
(Unaudited)
(dollars in thousands)
|
|
|
March 31 |
|
December
31 |
|
||
|
Assets |
|
|
|
|
|
||
|
Current Assets: |
|
|
|
|
|
||
|
Trade receivables, less allowances of $13,907 in 2004 and $16,876 in 2003 |
|
$ |
326,275 |
|
$ |
315,646 |
|
|
Inventories: |
|
|
|
|
|
||
|
Finished products |
|
328,729 |
|
316,109 |
|
||
|
Work in process |
|
102,427 |
|
124,594 |
|
||
|
Materials |
|
154,355 |
|
168,588 |
|
||
|
Total inventories |
|
585,511 |
|
609,291 |
|
||
|
Prepaid expenses, deferred income taxes and other receivables |
|
153,451 |
|
150,496 |
|
||
|
Total Current Assets |
|
1,065,237 |
|
1,075,433 |
|
||
|
Property and Equipment, at Cost |
|
2,038,312 |
|
2,009,202 |
|
||
|
Less: accumulated depreciation and amortization |
|
1,171,447 |
|
1,153,925 |
|
||
|
Net Property and Equipment |
|
866,865 |
|
855,277 |
|
||
|
Intangible Assets, net of amortization |
|
4,244 |
|
5,335 |
|
||
|
Goodwill |
|
80,973 |
|
80,973 |
|
||
|
Deferred Income Taxes and Other Assets |
|
272,073 |
|
233,145 |
|
||
|
|
|
$ |
2,289,392 |
|
$ |
2,250,163 |
|
|
Liabilities and Net Investment in Hospira, Inc. |
|
|
|
|
|
||
|
Current Liabilities: |
|
|
|
|
|
||
|
Trade accounts payable |
|
$ |
95,544 |
|
$ |
105,613 |
|
|
Salaries payable and other accruals |
|
278,969 |
|
253,988 |
|
||
|
Total Current Liabilities |
|
374,513 |
|
359,601 |
|
||
|
Post-employment Obligations and Other Long-term Liabilities |
|
440,746 |
|
437,098 |
|
||
|
Commitments and Contingencies |
|
|
|
|
|
||
|
Net investment in Hospira, Inc. by Abbott Laboratories |
|
1,532,757 |
|
1,480,943 |
|
||
|
Accumulated other comprehensive (loss) |
|
(58,624 |
) |
(27,479 |
) |
||
|
|
|
$ |
2,289,392 |
|
$ |
2,250,163 |
|
The accompanying notes are an integral part of these condensed combined financial statements.
4
Hospira, Inc.
Notes to Condensed Combined Financial Statements
March 31, 2004
(Unaudited)
Note 1 - Basis of Presentation
These condensed combined financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”) and, therefore, do not include all information and footnote disclosures normally included in audited financial statements. However, in the opinion of management, all adjustments,