Benefiting from higher sales and the repurchase of corporate debt, ICN Pharmaceuticals Inc. reported net income of $7 million for the fiscal third quarter ended Aug. 31. It had a $756,000 profit for the same period a year ago.
Third-quarter sales for the Costa Mesa firm were $41.7 million, up 31% from $31.9 million for the third quarter of fiscal 1987.
For the first nine months of fiscal 1988, ICN posted net income of $17.2 million, up from $4.5 million during the same period in fiscal 1987. Sales for the combined three quarters of fiscal 1988 were $117.4 million, up 40% from $83.7 million.
$5.2 Million in Gains
ICN enjoyed one-time gains of $5.2 million in the third quarter of fiscal 1988 and $11.3 million in the nine-month period, resulting from the company’s repurchase of long-term debt.
The gains reflect the difference between the market and book value of the repurchased bonds. The gains were recorded because ICN could buy back the bonds at a lower price than it otherwise would have had to pay to bondholders to retire the bonds in the future.
ICN lowered its long-term debt by $56.1 million in the nine months, which the company expects will result in future annual interest savings of about $3.5 million. The company’s long-term debt now totals about $271 million.
The company also attributed the sharp increase in its third-quarter earnings in part to strong growth of its pharmaceutical and biomedical operations.
SPI Pharmaceuticals, ICN’s pharmaceutical marketing company, reported net income of $2.3 million for the third quarter of fiscal 1988, a 28% increase from the $1.8 million posted for the third quarter of fiscal 1987.
SPI’s third-quarter sales were $28.7 million, up almost 41% from $20.4 million in last year’s third quarter.
SPI’s net income for the first nine months was $6.7 million, down 17% from $8.1 million for the first nine months of fiscal 1987. Its sales for the first nine months totaled $79.8 million. They were $52.5 million in the same period a year ago. The year-earlier period included a one-time, pretax gain of $9.3 million from the sale of marketable securities.
$181,000 in Net Income
Viratek, ICN’s pharmaceutical development company, reported third-quarter net income of $181,000. It had a $3.23-million net loss last year.
The increase in third-quarter income this year reflects a one-time gain of cash and facilities resulting from the dissolution of Viratek’s joint venture with the Eastman Kodak Co. Fiscal 1988 third-quarter revenue was $175,000, up slightly from $170,000 during the same quarter a year ago.
Viratek lost $6.68 million in the first nine months of fiscal 1988. It had a loss of $7.8 million during the same period a year ago.