Actelion Annual Report 2003 - Consolidated Financial Statements

Financials

THE ACTELION ANNUAL REPORT 2003

Consolidated Financial Statements

Consolidated Statements of Operations
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statement of Changes in Shareholders’ Equity

Consolidated Statements of Operations


			For the year ended

			December 31
(in CHF thousands, except share and per share amounts)	Note	2003	2002
Net revenue:
Products sales	2	300,315	121,834
Contract revenue	2	7,229	10,614
Total net revenue		307,544	132,448
Operating expenses
Cost of sales		31,816	13,076
Research and development		79,173	50,632
Marketing and advertising		79,828	56,584
Selling, general and administration		69,645	42,974
Amortization of acquired intangible assets	13	1,756	1,221
Write-off of acquired in-process research
and development	3	46,990	–
Total operating expense		309,208	164,487
Operating loss		(1,664)	(32,039)

Interest income		946	1,700
Interest expense		(885)	(346)
Amortization of debt discount and issuance costs		(1,500)	–
Other financial income (expense), net		2,567	(5,682)
Loss from continuing operations before income tax expense and share in loss of affiliate		(536)	(36,367)

Income tax expense	7	(830)	(113)
Loss from continuing operations before share in loss of affiliate		(1,366)	(36,480)

Share in loss of affiliate	3	(1,089)	(1,092)
Loss from continuing operations		(2,455)	(37,572)
Loss from discontinued operations, net of tax and minority interest	4	(7,461)	(14,485)
Net loss		(9,916)	(52,057)

Basic and diluted loss per share	8
Continuing Operations		(0.11)	(1.77)
Discontinued Operations		(0.35)	(0.68)
Net loss		(0.46)	(2.45)

The accompanying notes form an integral part of these consolidated financial statements.

Consolidated Balance Sheets


			December 31
(in CHF thousands, except share and per share amounts)	Note	2003	2002
Assets Current assets
Cash and cash equivalents	9	258,770	116,201
Marketable securities	10	–	4,851
Derivative instruments	10	2,199	1,622
Trade and other receivables, net	11	66,711	21,743
Inventories	12	21,455	13,821
Other current assets		3,966	2,841
Current assets of discontinued operations	4	10,385	3,460
Total current assets		363,486	164,539

Marketable securities, long-term	10	–	6,898
Property, plant and equipment, net	14	18,982	15,079
Investment in affiliate	3	–	2,171
Other assets		6,687	3,168
Intangible assets, net	13	8,813	9,945
Goodwill, net	13	3,784	3,672
Non-current assets of discontinued operations	4	1,091	13,488
Total assets		402,843	218,960

Liabilities and Shareholders’ Equity Current liabilities
Trade and other payables		27,535	25,108
Accrued expenses	15	37,601	18,549
Deferred revenue, current portion	6	10,821	6,318
Financial debt	16	41,161	–
Other current liabilities	17	2,019	563
Contingent consideration	3	6,641	–
Current liabilities of discontinued operations	4	8,758	5,373
Total current liabilities		134,536	55,911
Long-term financial debt, less current portion	16	145,147	40,000
Deferred revenue, less current portion	6	64,468	62,712
Other non-current liabilities	18	1,963	2,052
Non-current liabilities of discontinued operations	4	1,785	7,471
Total liabilities		347,899	168,146

Minority interest of discontinued operations	4	517	494
Commitments and contingencies	17

Shareholders’ Equity
Common shares (par value CHF 2.50 per share, authorized 30,506,640 and 27,456,640 shares; issued 21,751,148 and 21,376,559 shares in 2003 and 2002, respectively)		54,378	53,441
Additional paid-in-capital		302,817	289,671
Accumulated deficit		(297,226)	(287,310)
Unearned compensation		(5,369)	(3,936)
Treasury shares, at cost	19	(1,018)	(1,018)
Accumulated other comprehensive income (loss)	21	845	(528)
Total shareholders’ equity		54,427	50,320
Total liabilities, minority interest and shareholders’ equity		402,843	218,960

The accompanying notes form an integral part of these consolidated financial statements.

Consolidated Statements of Cash Flows


		December 31
(in CHF thousands)	2003	2002
Cash flows from operating activities
Net loss	(9,916)	(52,057)
Loss from discontinued operations, net of minority interest	7,461	14,485
Loss from continuing operations	(2,455)	(37,572)
Adjustments to reconcile net loss to net cash provided from operating activities:
Depreciation and amortization	7,549	5,301
Share in loss of affiliate	1,089	1,092
Stock-based compensation	4,819	3,690
Realized (gain) loss on sale of marketable securities	(602)	1,101
Gain on derivative instruments	(937)	(924)
Write-off of acquired in-process research and development	46,990	–
Amortization of debt discount and issuance costs	1,500	–
Increase in trade and other receivables	(44,837)	(13,880)
Increase in inventories	(7,633)	(7,575)
Increase in other current assets	(951)	(905)
Increase in other assets	(461)	(1,212)
Increase in trade and other payables	8,592	9,382
Increase in accrued expenses	18,290	13,088
Increase (decrease) in deferred revenue	5,891	(7,632)
Increase in other liabilities	1,484	265
Net cash flow provided by (used in) operating activities	38,328	(35,781)

Cash flows from investing activities
Purchase of marketable securities	–	(13,235)
Proceeds from sale of marketable securities	12,794	58,571
Purchase of property, plant and equipment	(7,114)	(5,351)
Purchase of derivative instruments	(1,621)	–
Proceeds from sale of derivative instruments	1,477	–
Purchase of intangible assets	(7,101)	(599)
Increase in investments in affiliates	-	(505)
Acquisition of subsidiary	(40,148)	–
Net cash flow provided by (used in) investing activities	(41,713)	38,881

Cash flows from financing activities
Payments on capital leases	(607)	(713)
Proceeds from issuance of financial debt	141,677	40,000
Proceeds from exercise of stock options	7,553	1,215
Acquisition of treasury shares	–	(1,018)
Proceeds from sale of treasury shares	–	55
Net cash flow provided by financing activities	148,623	39,539

Net effect of exchange rates on cash and cash equivalents	(993)	670
Net effect of discontinued operations	(1,676)	(18,141)
Net change in cash and cash equivalents	142,569	25,168

Cash and cash equivalents at beginning of year	116,201	91,033
Cash and cash equivalents at end of year	258,770	116,201
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest	972	162
Taxes	168	283

The accompanying notes form an integral part of these consolidated financial statements.

Consolidated Statement of Changes in Shareholders’ Equity


	Common Shares:
(in CHF thousands, except share amounts)	Shares	Amount	Additional Paid-in-Capital	Accumulated Deficit	Unearned Compensation	Treasury Shares	Other Comprehensive Income (Loss)	Shareholders’ Equity
At January 1, 2002	21,134,860	52,837	287,344	(235,253)	(8,247)	–	194	96,875
Comprehensive loss net of tax effect: Net loss				(52,057)				(52,057)
Other comprehensive income (loss): Unrealized gain (loss) on marketable securities							(263)	(263)
Currency translation adjustment							(459)	(459)
Comprehensive loss								(52,779)
Changes in underlying equity of affiliate			1,943					1,943
Exercise of stock options	241,699	604	611					1,215
Transactions in treasury shares	(13,500)		55			(1,018)		(963)
Stock-based compensation expense, net			888		3,141			4,029
Issuance of stock options			1,869		(1,869)			-
Stock option forfeitures and cancellations			(3,039)		3,039			-
At December 31, 2002	21,363,059	53,441	289,671	(287,310)	(3,936)	(1,018)	(528)	50,320

Comprehensive loss net of tax effect: Net loss				(9,916)				(9,916)
Other comprehensive income (loss):
Currency translation adjustment							1,373	1,373
Comprehensive loss								(8,543)
Changes in underlying equity of affiliate			93					93
Exercise of stock options	374,589	937	6,616					7,553
Stock-based compensation expense, net			653		4,351			5,004
Issuance of stock options			6,023		(6,023)			–
Stock option forfeitures and cancellations			(239)		239			–
At December 31, 2003	21,737,648	54,378	302,817	(297,226)	(5,369)	(1,018)	845	54,427

The accompanying notes form an integral part of these consolidated financial statements.