Jul 31 2010
Warner Chilcott plc (Nasdaq: WCRX) today announced a recapitalization pursuant to which it intends to incur, subject to market and other conditions, $2.25 billion of new debt to fund a special dividend to Warner Chilcott's ordinary shareholders of $8.50 per share, or approximately $2.15 billion in the aggregate. The new debt is expected to be comprised of a combination of senior secured term loans and additional unsecured debt.
The declaration of the special cash dividend is conditioned on the amendment of the Company's existing senior secured credit facilities to permit, among other things, the incurrence of the additional indebtedness needed to fund the special cash dividend. Warner Chilcott intends to declare the special cash dividend upon the successful amendment of the existing credit facilities and after obtaining debt financing under acceptable terms. The Company currently expects to declare and pay the special cash dividend before the end of the third quarter of 2010.
2010 OUTLOOK
The Company is also affirming its previously issued full-year 2010 financial guidance for adjusted total revenue, SG&A expense and income taxes, while adjusting its projections for adjusted gross margin, R&D expense, adjusted net income, adjusted cash net income ("CNI") and adjusted CNI per share. Adjusted total revenue for the full year 2010 is expected to be near the lower end of the current guidance range of $2.90 billion to $2.95 billion. The expectation for adjusted CNI for the full-year 2010, before giving effect to the impact of the proposed recapitalization plan, has been increased from a range of $3.30 to $3.40 per share to a range of $3.45 to $3.55 per share. Please refer to the attached exhibit for full details of the Company's 2010 revised financial guidance.
Assuming the successful completion of the proposed recapitalization plan, the Company estimates that its full-year 2010 adjusted CNI would be reduced by $0.20 to $0.25 per share. Looking ahead to the full year 2011, the recapitalization is expected to reduce 2011 adjusted CNI by $0.65 to $0.70 per share. These anticipated reductions of adjusted CNI per share would result from the estimated increased cash interest expense associated with the issuance of $2.25 billion of additional debt and the expected repricing impact of the Company's outstanding term debt using current market assumptions. The expected impact on adjusted CNI per share is based on 255 million fully-diluted shares outstanding.