MYL

Mylan Inc. (MYL)

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Mylan Inc. (MYL)

Q4 2009 Earnings Call Transcript

February 25, 2010 10:00 am ET

Executives

Dan Crookshank – VP, Global IR

Robert Coury – Chairman and CEO

Heather Bresch – President

Dan Rizzo – SVP, Chief Accounting Officer & Corporate Controller

Brain Byala – SVP and Treasurer

Rajiv Malik – EVP and COO

Analysts

Chris Schott – JPMorgan

Rich Silver – Barclays Capital

Randall Stanicky – Goldman Sachs

John Boris – Citi

Frank Pinkerton – SunTrust

Elliot Wilbur – Needham & Company

David Buck – Buckingham Research Group

Marc Goodman – UBS

Gregg Gilbert – Bank of America Merrill Lynch

Ken Cacciatore – Cowen and Company

Ronny Gal – Bernstein

Presentation

Operator

Good morning, everyone. We’re about to begin Mylan’s 2009 fourth quarter earnings conference call. As a reminder, this morning’s call is being recorded. For opening remarks and introductions, I would like to turn the conference over to Mr. Dan Crookshank, Mylan’s Vice President of Global Investor Relations. Please go ahead.

Dan Crookshank

Thank you, Melanie. Good morning, everyone. Joining me for today’s call are Mylan’s Chairman, Chief Executive Officer, Robert J. Coury, President, Heather Bresch, Executive Vice President and Chief Operating Officer, Rajiv Malik, Senior Vice President, Corporate Controller and Principal Financial and Accounting Officer, Dan Rizzo and Senior Vice President and Treasurer, Brian Byala.

As we begin, I’d like to point out that as indicated in this morning’s press release, presentation available under live internet webcast, which President, Heather Bresch will be referring to, as she delivers her prepared remarks this morning. So I highly encourage you to access our webcast at www.mylan.com to view these slides. In addition, webcast will be available for replay on our Web site for up to seven days following the conclusion of today’s call.

During today’s call, including the Q&A, we will be making forward-looking statements, including those related 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 risk 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 quarterly report on Form 10-Q for the quarter ended December 30th, 2009 and in our other Securities and Exchange Commission filings. You can access our Form 10-Q and other SEC filings through the SEC Web site at www.sec.gov. We encourage you to do so.

In addition, during the conference call, we will be presenting and 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, adjusted diluted EPS should be used only as a supplement to, not as a substitute for or as a superior measure to measures of financial performance prepared in accordance with GAAP.

Please refer to today’s earnings release, which is available on our Web site as it contains detailed GAAP to non-GAAP reconciliations of our actual 2009 and 2008 fourth quarter and full year results, including the allocation of each reconciled 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.

Robert Coury

Thank you, Dan. Welcome, everyone, and thank you for joining us this morning. Before we get started I’d like to say, hello, and once again recognize all of our employees around the world who continue to dedicate themselves to helping Mylan meet its goal of becoming the highest quality and most efficient global generics and specialty pharmaceutical company in the industry.

Time and time again, our employees deliver results that outpace expectations. On behalf of our Board of Directors and our Management team, I would like to thank each and every one of them.

Since I became Mylan’s Chief Executive Officer almost eight years ago, we’ve been committed to a very clear and consistent growth strategy, which is to combine Mylan’s existing strong organic capabilities with external opportunities.

Today, it is very evident that that Mylan has successfully implemented the strategy, as demonstrated by the global platform we’ve created as well as the strong union we have forged between the vision, that vision and the impeccable execution to-date. This ultimately is what’s delivering the solid results and anticipated growth that we are here to report to you today.

Before we look at 2010 and beyond, I’d like to review a few key accomplishments from 2009. First, I am pleased with the very strong fourth quarter results capping off yet another extremely successful year, our second full year of operating the new Mylan.

As stated many times, we knew that 2009 was going to be a year dependent predominantly on tremendous execution, and again, I would like to thank my management team and all of our employees for making that happen.

Our fourth quarter adjusted diluted earnings per share came in at $0.33, a 27% increase over the same quarter in 2008. For the year, we delivered an adjusted diluted earnings per share of $1.30, which is a 63% increase over 2008.

This surge in our adjusted diluted earnings per share represents the highest annual growth rate among our industry peers by a very significant margin, a statistic that we are proud of and a trend that we fully expect to continue throughout the next several years.

In addition, to the impeccable execution from operations, we were able to generate strong operating cash flows throughout the year. Some of the excess cash flows were used to purchase the bulk of the remaining minority interest of Matrix, now a privately held subsidiary and some was used to deliver on our commitment to continue to delever by pre-paying approximately $350 million in bank term loans borrowings that were due in 2010 and 2011. We’re now in a position where we have only minimal long-term obligations due before 2012.

In 2009, we also continued to see the rewards for the hard work and outstanding leadership of Mylan’s best-in-class management team. Heather Bresch was promoted to President and Rajiv Malik succeeded Heather in the position of Chief Operating Officer. These changes, as well as many other promotions throughout our company, continue to reflect the recognition and strong track record of this management team.

We also continue to successfully attract exceptional leaders from outside as well. As you know, today, we announced the appointment of John Sheehan, as Mylan’s new Chief Financial Officer, an appointment that I am very excited about. John’s extensive and broad-based technical knowledge, significant multinational manufacturing experience and his ability to lead large complex international finance organizations, make him an outstanding addition to Mylan.

Read the rest of this transcript for free on seekingalpha.com