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Enzon Reports 1st Quarter 2011 Results

Stocks in this article: ENZN

Restructuring Charges

During the first quarter of 2011, the Company completed the planned relocation of its corporate offices from Bridgewater, New Jersey to Piscataway, New Jersey. As a result of having vacated the excess office space in Bridgewater, the Company incurred a charge during the first quarter of 2011 in the amount of approximately $0.4 million. This amount represents the excess of committed lease costs over potential sublease income. The Company recognized $9.9 million related to separation benefits in the first quarter of 2010. These expenses related to a workforce reduction involving 64 employees, primarily associated with the sale of the specialty pharmaceutical business and separation costs associated with the resignation of the Company’s then CEO.

Cash and Investments

Total cash reserves, which include cash, cash equivalents, short-term investments, and marketable securities, were $418.9 million as of March 31, 2011, as compared to $460.1 million as of December 31, 2010. During the first quarter of 2011, the Company expended approximately $41.5 million to purchase 3.9 million shares of its outstanding common stock. Since the inception of a $200 million share repurchase program in December 2010, the Company has purchased a total of 5.7 million shares of its outstanding common stock for a cumulative cost of $62.2 million through April 30, 2011.

Adjusted Financial Results

For the three months ended March 31, 2011, Enzon reported an adjusted loss from continuing operations of $4.2 million, or $(0.07) per diluted share, as compared to an adjusted loss from continuing operations of $10.3 million, or $(0.20) per diluted share, for the three months ended March 31, 2010.

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

The following table reconciles the Company's income and income 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 March 31, 2011 and 2010:

           
 

Three Months Ended 3/31/11

(In thousands, exceptper-share data)

 

Three Months Ended 3/31/10

(In thousands, exceptper-share data)

Income (loss)   Per diluted share (3) Income (loss)   Per diluted share (3)
   

GAAP income from continuingoperations

$

431

$ 0.01 $ 20,754 $ 0.29

Sale of in-process research anddevelopment associated withthe specialty pharmaceuticalbusiness (1)

 

(5,000

 

)

 

 

-

 

 

(40,900

 

 

)

 

 

-

Restructuring charge (2) 359 - 9,889 -
           

Adjusted loss from continuingoperations (4)

 

($4,210

)

   

($0.07

)

 

($10,257

)

   

($0.20

)

                                 

(1) Adjusted financial results exclude the sale of in-process research and development associated with the sale of the Company’s specialty pharmaceutical business and the subsequent milestone payment.

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