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TheStreet Open House

Enzon Reports Second Quarter 2010 Results

Restructuring Charge

The restructuring charges of approximately $0.7 million for the quarter ended June 30, 2010, was predominantly related to the write-off of the carrying value of certain furnishings and leasehold improvements located at the Company’s facility in Bridgewater, New Jersey. As part of the sale of the specialty pharmaceutical business in January 2010 and the Company’s ongoing effort to reduce overhead expenses, the Company consolidated a large portion of its operations to its research facility in Piscataway, New Jersey.

Cash and Investments

Total cash reserves, which include cash, cash equivalents, short-term investments, and marketable securities, were $504.0 million as of June 30, 2010, as compared to $199.7 million as of December 31, 2009. The increase is primarily due to the proceeds the Company received from the sale of the specialty pharmaceutical business. Also during the first six months of 2010, the Company received approximately $25.0 million from employee stock option exercises which was partially offset by the purchase of $18.1 million of its outstanding common stock. Since the inception of its share repurchase program in December 2009, the Company has purchased approximately 2.1 million shares of its outstanding common stock at a cost of $21.5 million.

Discontinued Operations

Specialty Pharmaceutical Business Results

During the second quarter of 2009, the specialty pharmaceutical business generated an income of $14.6 million. This was a result of the revenue recognized from sales of the four specialty pharmaceutical products and contract manufacturing, offset by associated expenses for the divested business.

Reconciliation of GAAP loss from continuing operations to adjusted loss from continuing operations

The following table reconciles the Company's loss and loss per diluted share from continuing operations as determined in accordance with U.S. generally accepted accounting principles (GAAP) to its adjusted loss and loss per diluted share from continuing operations for the three months ended June 30, 2010 and 2009:

Enzon Pharmaceuticals, Inc.

Adjusted Net Loss
Quarters Ended 6/30/10 and 6/30/09
               
 
Quarter Ended 6/30/10

Quarter Ended 6/30/09

Net loss  

Net loss per

diluted share

Net loss  

Net loss per

diluted share

 
GAAP loss from continuing operations (5,443 ) (0.09 ) (19,657 ) (0.43 )
Net adjustments to GAAP:
 
Restructuring charge (1) 710 0.01 - -
       
Adjusted loss from continuing operations (2) (4,733 ) (0.08 ) (19,657 ) (0.43 )
 
Basic shares outstanding 60,849 45,187
Diluted shares outstanding 60,849 45,187

(1) Adjusted financial results exclude restructuring charges for the write down of a portion of our leasehold improvements and furnishings which are no longer in use as a result of the consolidation of operations.

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