Stock Analysis on Net
Stock Analysis on Net

Allergan PLC (NYSE:AGN)

This company has been moved to the archive! The financial data has not been updated since May 7, 2020.

Common-Size Income Statement

Allergan PLC, common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net revenues 100.00 100.00 100.00 100.00 100.00
Cost of sales, excludes amortization and impairment of acquired intangibles including product rights -15.50 -13.88 -13.60 -12.77 -31.92
Gross profit 84.50% 86.12% 86.40% 87.23% 68.08%
Research and development -11.26 -14.35 -13.17 -17.68 -15.65
Selling and marketing -21.52 -20.59 -22.05 -22.42 -19.34
General and administrative -15.43 -8.05 -9.42 -10.12 -11.72
Amortization -36.40 -41.50 -45.15 -44.41 -36.18
Goodwill impairments -22.08 -18.00 0.00 0.00 0.00
In-process research and development impairments -2.71 -5.10 -9.11 -5.11 -3.39
Asset sales and impairments, net -2.74 -18.10 -24.64 -0.03 -1.80
Operating loss -27.63% -39.57% -37.15% -12.53% -20.00%
Interest income 0.48 0.29 0.42 0.48 0.08
Interest expense -4.87 -5.77 -6.87 -8.89 -7.92
Teva Share Activity 0.00 0.39 -20.51 0.00 0.00
Sale of businesses 0.00 1.16 0.00 0.00 0.00
Debt extinguishment costs as part of the debt tender offer 0.00 0.00 -1.01 0.00 0.00
Debt extinguishment other 0.00 0.10 -0.17 0.00 0.00
Other-than-temporary impairments 0.00 0.00 -0.16 0.00 0.00
Dividend income 0.00 0.00 0.53 0.47 0.00
Naurex recovery 0.00 0.00 0.13 0.00 0.00
Forward sale of Teva shares 0.00 0.00 -0.39 0.00 0.00
Pfizer termination fee, Allergan plc only 0.00 0.00 0.00 1.03 0.00
Bridge loan commitment fee 0.00 0.00 0.00 0.00 -1.76
Interest rate lock 0.00 0.00 0.00 0.00 0.21
Other 0.21 -0.02 0.03 0.01 0.00
Other income (expense), net 0.20% 1.63% -21.56% 1.50% -1.55%
Loss before income taxes and noncontrolling interest -31.82% -43.43% -65.16% -19.44% -29.40%
(Provision) benefit for income taxes -0.91 11.22 41.85 13.02 10.36
Net loss from continuing operations, net of tax -32.73% -32.22% -23.31% -6.42% -19.03%
Income (loss) from discontinued operations, net of tax 0.00 0.00 -2.53 109.22 45.04
Net income (loss) -32.73% -32.22% -25.84% 102.81% 26.01%
Income attributable to noncontrolling interest -0.04 -0.06 -0.04 -0.04 -0.03
Net income (loss) attributable to shareholders -32.76% -32.28% -25.88% 102.76% 25.98%
Dividends on preferred shares 0.00 -0.29 -1.75 -1.91 -1.54
Net income (loss) attributable to ordinary shareholders -32.76% -32.58% -27.63% 100.85% 24.44%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

The financial trajectory between 2015 and 2019 is characterized by a stark divergence between strong gross profitability and significant bottom-line losses. While the company successfully optimized its direct production costs, the overall result was heavily suppressed by substantial non-cash charges and impairment losses.

Gross Profitability and Direct Costs
A significant improvement in gross margins is observed following 2015. The cost of sales decreased from 31.92% of net revenues in 2015 to a range between 12.77% and 15.50% from 2016 through 2019. Consequently, gross profit margins ascended from 68.08% to a peak of 87.23% in 2016, remaining consistently above 84% for the remainder of the period.
Operating Expense Trends
Selling and marketing expenses remained relatively stable, fluctuating between 19.34% and 22.42% of net revenues. Research and development spending showed a general downward trend, declining from a high of 17.68% in 2016 to 11.26% in 2019. General and administrative expenses decreased steadily from 11.72% in 2015 to a low of 8.05% in 2018, before spiking to 15.43% in 2019.
Non-Cash Charges and Impairments
The most significant pressures on operating income stem from amortization and impairment charges. Amortization consistently consumed a large portion of revenue, ranging from 36.18% to 45.15%. Furthermore, substantial asset sales and impairments peaked in 2017 at 24.64% and 2018 at 18.10%. In the final two years of the period, goodwill impairments emerged as a primary driver of loss, representing 18.00% of revenue in 2018 and 22.08% in 2019.
Net Income and Structural Performance
The reported net income for 2015 and 2016 was heavily distorted by income from discontinued operations, which contributed 45.04% and 109.22% of net revenues, respectively. Once these discontinued operations were removed from the equation, the company experienced consistent net losses from 2017 onward. The net loss attributable to ordinary shareholders shifted from a gain of 100.85% in 2016 to losses ranging from 25.88% to 32.76% between 2017 and 2019.
Financial Obligations and Other Items
Interest expense as a percentage of net revenues showed a gradual decline from 7.92% in 2015 to 4.87% in 2019. Volatility in other income and expenses was notably influenced by Teva share activity, which incurred a 20.51% loss relative to revenue in 2017.

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