Q3 2010 Earnings Call
July 29, 2010 10:00 am ET
Heather Bresch - President
John Sheehan - Chief Financial Officer and Executive Vice President
Robert Coury - Chairman and Chief Executive Officer
Kris King - Executive Director of Investor Relations
John Boris - Citigroup Inc
Ronny Gal - Bernstein Research
Richard Silver - Barclays Capital
Elliot Wilbur - Needham & Company, LLC
Gregory Gilbert - BofA Merrill Lynch
Christopher Schott - JP Morgan Chase & Co
Randall Stanicky - Goldman Sachs Group Inc.
John Newman - Oppenheimer & Co. Inc.
Marc Goodman - UBS Investment Bank
Previous Statements by MYL
» Mylan Laboratories Inc. Q1 2010 Earnings Call Transcript
» Mylan Inc. Q4 2009 Earnings Call Transcript
» Mylan Inc. Q2 2009 Earnings Call Transcript
Good day, and welcome to the Mylan, Inc. Third Quarter Fiscal 2010 Earnings Conference Call. [Operator Instructions] At this time, I'd like to turn the conference over to Ms. Kris King, Vice President of Global Investor Relations. Please go ahead.
Thank you, Lisa. Good afternoon, everyone. Joining me for today's call are Mylan's Chairman and Chief Executive Officer, Robert J. Coury; President, Heather Bresch; Executive Vice President and Chief Financial Officer, John Sheehan; and Executive Vice President and Chief Operating Officer, Rajiv Malik.
During today's call, including the Q&A, we will be making forward-looking statements including those relating to our anticipated business levels, our future earnings, our planned activities, our anticipated growth and other expectations and targets for future periods. Note that these statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Because these statements are forward-looking, they inherently involve risks and uncertainties and accordingly, our actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the risk factors set forth in our annual report on Form 10-K for the year ended December 31, 2009, and in our other SEC filings. You can access our Form 10-K and other SEC filings through the SEC website at www.sec.gov, and we strongly encourage you to do so.
In addition, during this call, we will be referring to certain actual and projected financial metrics of Mylan on an adjusted basis, which are non-GAAP measures. It should be noted that non-GAAP financial measures such as adjusted revenues, adjusted gross margin and adjusted diluted EPS should be used only as a supplement to, not as a substitute for, or as a superior to measures of financial performance prepared in accordance with GAAP. Please refer to today's earnings press release, which is available on our website as it contains detailed GAAP to non-GAAP reconciliations of our actual 2010 and 2009 third quarter results, including the allocation of each reconciled line item to specific income statement line items.
Before I turn the call over to Robert, let me also remind you that the material in the call, with the exception of the participant questions, is the property of Mylan and cannot be recorded or rebroadcast without Mylan's expressed written permission.
With that, I'll now turn the call over to Robert.
Thank you, Kris. Welcome, everyone and thank you for taking the time to join us this afternoon. I would also like to welcome all of the Mylan employees on the call today, especially those from Bioniche Pharma, who are listening as the new members of the Mylan family. On behalf of the Board of Directors and our leadership team, I'd like to thank each and everyone of you for your continued hard work, dedication and outstanding performance.
I am extremely pleased to report to you yet another strong quarter performance of exceptional earnings. As I mentioned on the last conference call, I did anticipate the third quarter to be better than the second quarter, and I am extremely pleased to report adjusted diluted earnings per share of $0.43, a 16% increase from our second quarter results. With that said, I still expect at this time that the fourth quarter will come in slightly better than the third quarter.
We maintain this position even with the most recent ruling related to our Paroxetine CR. While we are extremely disappointed with the lower court's ruling, we believe strongly that the lower court has erred in its decision not to grant us an injunction, and we have appealed that decision. It should also be noted that this is still just a ruling on an injunction. It is not a final decision resolving Mylan's rights on this matter. Regardless of the outcome of the appellant court decision on the injunction, we will continue our litigation to enforce our contractual rights and all of its negotiated provisions with GSK.
With that said, and irrespective of this short-term distraction, the longer-term fundamentals of our business have not changed, which is why we remain committed to our stated targets of $2 of adjusted diluted earnings per share for calendar year 2011 and our longer-term growth targets of 15% top line and 20% bottom line CAGR by the end of 2013. We very much look forward to providing you a detailed breakdown of our 2011 guidance on our next conference call.
Moving on to other activity in the quarter. You will recall that we issued $300 million in follow-on 10-year bonds to finance the acquisition of Bioniche Pharma. In addition, we are also able to use part of the strong operating cash flows that we continue to generate to prepay $300 million in term loan borrowings in the third quarter as well, further reducing our leverage and staying committed to our stated objective to achieve a 3:1 debt-to-adjusted-EBITDA leverage ratio.