Financial Markets Stabilize but Downsides Remain - NASDAQ Financial Markets Stabilize but Downsides Remain - NASDAQ

Monday, May 21, 2012

Financial Markets Stabilize but Downsides Remain - NASDAQ

Financial Markets Stabilize but Downsides Remain - NASDAQ

(IBTimes) - Financial markets stabilized in Asian session on Monday after the G-8 meeting. However, the actual macroeconomic outlook and the situation in the Eurozone sovereign debt crisis have not changed much from previous week. Therefore, it is reasonable to anticipate more downsides after the recovery. In China, Premier Wen Jaibao was reported of having said that the priority should be given to stimulating growth. This led to anticipations that further reduction in RRR will come.

The focus of the G-8 meeting over the weekend was undoubtedly on the sovereign debt crisis in the Eurozone. It was stated in the communiqué that world finance leaders "agree on the importance of a strong and cohesive euro zone for global stability and recovery, and we affirm our interest in Greece remaining in the Eurozone while respecting its commitments". Concerning the global economic outlook, the leaders acknowledged persistence of "significant headwinds" and they pledged to "take all necessary steps to strengthen and reinvigorate our economies and combat financial stresses, recognizing that the right measures are not the same for each of us". However, there were no further detailed plans on how to resolve the problems.

In China, Premier Wen Jiabao stated that the government "should continue to implement a proactive fiscal policy and a prudent monetary policy, while giving more priority to maintaining growth". The comments indicated that the government sees more is needed to be done to stimulate growth. It's expected that the PBOC will implement further RRR cuts following last week's reduction which would inject RMB 400B to the banking system.

Commitments of Traders:

Speculators were mixed towards the energy complex in the week ended May 15. Net length for crude oil futures added +503 contracts to 184 463. Net length for heating oil slipped -3 084 contracts to 10 131 while that for gasoline dropped -2 581 to 71 811. Net short for natural gas futures added +4 349 contracts to 109 424.

Speculators were bearish towards precious metals. Net length for gold futures dipped -9 161 contracts to 114 142 while that for silver declined -1 089 contracts to 11 474 contracts. For PGMs, net length for platinum decreased -1 358 contracts to 14 370 while that for palladium dropped -2 134 to 2 919.










Original Source:

For more information, go to

US STOCKS-Wall St bounces but investors dump Facebook - Reuters

Mon May 21, 2012 12:00pm EDT

* Facebook shares down 12 pct, trades near $33/share

* World leaders back Greece, vow to combat crisis

* Apple stock boosts Nasdaq

* Stocks: Dow up 0.7 pct, S&P up 1 pct, Nasdaq up 1.3 pct

By Edward Krudy

NEW YORK, May 21 (Reuters) - U.S. stocks rose on Monday after their worst weekly decline for the year with signs investors were quickly exiting newly floated shares of Facebook following its broken IPO and redeploying capital elsewhere in the market.

Facebook Inc's shares fell below their $38 issue price as support from underwriters of the initial public offering dissipated after its Friday debut. The stock dropped over $5 to hit a session low of $33.00 in early trading, last trading down 11.8 percent at $33.71.

That contrasted with a sizeable rally in shares of Apple, which rose 2.8 percent to $545.14. Apple's shares are off almost 15 percent from a peak in April.

"People were coming out of Apple to participate in Facebook," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "Facebook is not doing what they thought it would so maybe they'll take that capital back where they had it."

On Saturday, G8 leaders stressed that their "imperative is to promote growth and jobs" and gave verbal backing for Greece to stay in the euro. That helped lift the sentiment after failed elections in Greece lifted speculation that the country was headed toward exiting the euro zone.

"We sold off on some fear and not all of that fear was realized," said Lesh. "We're in a bit of an oversold bounce in here at the moment and whether we're going to build on all of this we'll find out this week; we'll still hostage to European news and will be for the foreseeable future."

The Dow Jones industrial average gained 82.27 points, or 0.67 percent, to 12,451.65. The Standard & Poor's 500 Index rose 12.40 points, or 0.96 percent, to 1,307.62. The Nasdaq Composite Index added 36.92 points, or 1.33 percent, to 2,815.71.

Investors are watching 1,300 to 1,290 range on the S&P 500 as a major support level, the lower end of which was tested last week after the index fell 7.8 percent since April. The bottom of the range coincides with the index's 10 month moving average.

"The ability to find support near 1,290-1,300 can trigger buyers to return, igniting the next sustainable rally towards our 2012 target in the mid-1,400s and possibly overshoot to low-1,500s," said technical analysts at UBS.

Facebook shares were expected to face tough trading this week if lead underwriter Morgan Stanley stops supporting the stock and managers lower down in the IPO book who were hoping for an early surge decide to get out before going underwater.

"It was just a poorly done deal and it just so happens to be the biggest deal ever for Nasdaq and they pooched it, that's the bottom line here," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

In earnings news, Lowe's Cos Inc, the world's second-largest home improvement chain, cut its fiscal-year earnings outlook and said demand slowed toward the end of the traditionally strong first quarter. The shares fell 9.8 percent to $25.69.

Yahoo shares rose 0.5 percent to $15.50 after news that Chinese Internet entrepreneur Jack Ma is buying back up to half of a 40 percent stake in his Alibaba Group from Yahoo for $7.1 billion in a deal that moves the Chinese e-commerce leader closer to a public listing.

The Nasdaq said it plans to implement procedures through which the Financial Industry Regulatory Authority (FINRA) will accommodate orders not executed in Facebook during the social media company's market debut on Friday. Nasdaq shares gained 2.6 percent after falling more than 4 percent on Friday.

Business News: Pailton Engineering's going places - Coventry

Stocks Remain Firmly Positive In Mid-Day Trading - U.S. Commentary - NASDAQ

( - Stocks have moved mostly higher during trading on Monday, regaining some ground after falling sharply in recent weeks. The markets have benefited from bargain hunting, although stocks remain well off their recent highs.

The major averages have moved roughly sideways in recent trading, hovering firmly in positive territory. The Dow is up 85.90 points or 0.7 percent to 12,455.28, the Nasdaq is up 37.78 points or 1.4 percent at 2,816.57 and the S&P 500 is up 12.52 points or 1 percent at 1,307.74.

The strength that has emerged on Wall Street comes as traders are picking up stocks at reduced levels following the recent downward trend, which pulled the major averages down to four-month closing lows on Friday.

Nonetheless, buying interest remains relatively subdued amid lingering concerns about the financial situation in Europe. A lack of major U.S. economic data is also keeping some traders on the sidelines.

While reports on home sales, durable goods orders, and consumer sentiment are likely to be in focus later this week along with earnings news from Hewlett-Packard (HPQ), Dell (DELL), and Best Buy (BBY) trading activity may remain light.

With earnings season drawing to a close, some traders are likely to take the opportunity to step away from the markets and go on an early summer vacation.

Among individual stocks, American Eagle Outfitters (AEO) is posting a strong gain after the apparel retailer announced plans to exit its children's business 77kids. The company also said its chief financial officer Joan Hilson is stepping down.

Shares of Yahoo (YHOO) are nearly unchanged after the online media giant announced that it is selling up to half of its stake in Alibaba back to the Chinese e-commerce company for about $7.1 billion.

Meanwhile, Lowe's (LOW) is posting a steep loss after the home improvement retailer reported better than expected first quarter results but lowered its full year earnings guidance.

Shares of Facebook (FB) have also come under pressure, with the social media giant tumbling by 11.6 percent following its glitch-plagued debut on Friday.

Sector News

Gold stocks are turning in some of the market's best performances in mid-day trading, with the NYSE Arca Gold Bugs Index up by 2.3 percent. With the gain, the index is climbing further off the two-year low set last Tuesday.

The strength among gold stocks comes despite a decrease by the price of the precious metal. Gold for June delivery is down $1.20 at $1,590.70 an ounce, although it is well off its lows.

Significant strength is also visible among oil service stocks, which are moving higher along with the price of crude oil. With crude for June delivery climbing $0.64 to $92.12 a barrel, the Philadelphia Oil Service Index is up by 2.5 percent.

Computer hardware stocks have also shown a strong move to the upside on the day, driving the NYSE Computer Hardware Index up by 2.4 percent. Steel, health insurance, networking, and chemical stocks are also posting notable gains.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index crept up by 0.3 percent, while Hong Kong's Hang Seng Index ended the day down by 0.2 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index advanced by 1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index rose by 0.7 percent and 0.6 percent, respectively.

In the bond market, treasuries are seeing modest weakness after rising sharply in recent sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.9 basis points at 1.731 percent.

For comments and feedback: contact

Get Started: Small business week, owner confidence - NECN

This is National Small Business Week, when government agencies and small business organizations around the country hold networking events and forums. While the Small Business Administration is holding three days of events in Washington, D.C., some of the Small Business Development Centers it sponsors are having their own programs. For example, the SBDC at the University of Central Florida holds workshops Wednesday and Thursday in Orlando to teach small business owners how to pursue business opportunities with the federal government. You can find out more about the events at . If you're looking for an event in your area, do an online search for "Small Business Week" and your town, city or state.

Separately this week: The New York City Department of Small Business Services holds a workshop Tuesday to help owners sharpen their marketing skills. Among the topics to be covered will be how to build your company's brand and the importance of knowing your target customers.


Small business owners are more confident about their local economies than they are about the national economy. In the next 12 months, 42 percent of the participants expect their local economic conditions to improve, while 35 percent expect the national economy to get better, according to Bank of America's small business owner report, which surveyed small business owners from across the nation.

Their top economic concerns were effectiveness of government leaders, oil and gas prices and consumer spending. Still, many small business owners are feeling optimistic. One reason is they believe in their ability to help their companies grow. Fifty-three percent of the participants said their own decisions rather than the health of the economy are likely to affect how well their companies do.

On a more personal note, 38 percent of the respondents said that running a business is the most stressful thing they deal with. More than half have sacrificed personal time, and more than a third have let go of keeping physically fit, to keep up with business demands.


A look at hiring by construction firms shows that the industry's recovery from the housing collapse and recession isn't gaining momentum. The Associated General Contractors of America said that only 19 states had gains in construction jobs in April compared to March employment levels, while 28 states and Washington D.C. lost jobs. In three states, construction employment was unchanged. The numbers were little changed from a similar report by the trade group a year earlier. Ken Simonson, the association's chief economist, said there were signs that homebuilding is starting to recover, but that government spending on buildings, roads and other projects is decreasing.


Eight bills aimed at making it easier for small companies to win federal contracts were approved Friday by the House of Representatives. But their fate is uncertain because of a possible presidential veto of accompanying legislation.

The contracting bills are attached to $642 billion defense spending bill, which passed the House by a vote of 229-120. It goes next to the Senate. President Barack Obama has threatened to veto the bill because it has significant changes from his proposed Pentagon budget.

The contracting bills include the Government Efficiency Through Small Business Contracting Act, which would raise to 25 percent the amount of federal contracting dollars that should go to small businesses. Under current law, the figure is 23 percent. The package also includes legislation to fight fraud in contracting and a revamp of the standards the SBA uses to determine what a small business is.


The SBA holds an online seminar on May 29 about preparing your business for a hurricane. Dr. Gerry Bell, a member of the National Oceanic and Atmospheric Administration's Long-Range Hurricane Outlook Team, will present the forecast for the 2012 Atlantic Hurricane Season. The seminar will also feature disaster preparation tips. You can register at


Joyce Rosenberg can be reached at

As business suffers, David Cameron retreats - Daily Telegraph

Taken together, these two factors deter employers from recruiting new staff and hinder businesses from developing the higher productivity on which sustainable growth depends. And far from making things better, the past decade has seen a steady increase in the level and complexity of employment law. Beecroft’s report would have reduced the amount of regulation in a comprehensive and principled way – and, by doing so, would have introduced new certainty and confidence.

That confidence matters, because businesses are far too short of it at present. British businesses collectively hold about £750 billion in cash. To reach its fiscal targets, the Government needs a steep rise in investment – the rate at which they spend that money. Speaking last week, David Cameron said that he leads “a Government resolutely committed to being on the side of enterprise, entrepreneurs, businesses large and small, wealth creation of all types and descriptions”. To many, that is clearly not the case. A full-blooded Beecroft Review would reassure such people, just as a pale imitation would reinforce their concerns.

Taking a step back, today’s news adds to a sense of unease about what the Coalition is actually trying to achieve. This is a Government that claims to have deregulation at its heart, fired by a Tory belief in free markets and a Lib Dem distrust of central direction. It has a policy to stop the growth in regulation (so-called “One In, One Out”) and to reduce the stock of it (the “Red Tape Challenge”). In general, it is supposed to have rejected an old approach based on more debt and higher state spending, and to be looking for real growth via higher productivity.

Recently, however, we have seen a weakening in the Government’s position. Last autumn, the Chancellor pushed his deficit reduction target from the end of this Parliament into the middle of the next. Last week, the Prime Minister hinted at new borrowing to finance infrastructure – exactly the way that Gordon Brown justified his record spending increases. At the same time, the retreat over the NHS has cast a long shadow over the Coalition’s commitment to public-service reform, and its changes to the planning system are taking much longer than expected.

In recent days, the Prime Minister has urged his European counterparts to take action by saying that the eurozone is “at a crossroads”. He should hold his own Government to account in the same terms. Given the challenges facing the country, it is surprising that he needed an independent report to propose changes to employment law at all. Now that he has it, it will be remarkable if he does not implement it – and then keep up the pressure.

Mr Cameron is right that the country’s basic economic problems are due to poor productivity rather than lack of government action. He will know, however, that the contrary view is growing in popularity (and, indeed, capable of winning elections in other countries). The more his policies focus rigorously and consistently on improving the efficiency of the economy, the more successful they will be.

Andrew Haldenby is director of the independent think tank Reform

SciClone Reports Financial Results for the First Quarter 2012 - Yahoo Finance

FOSTER CITY, CA--(Marketwire -05/09/12)- SciClone Pharmaceuticals, Inc. (SCLN) today reported financial results for the first quarter ended March 31, 2012. Revenues increased by 81% for the quarter ended March 31, 2012, to $39.2 million, compared to revenues for the same period in the prior year of $21.7 million. The increases in revenues in the first quarter were due to the continued growth of the ZADAXIN business in China and the inclusion of the NovaMed Pharmaceuticals, Inc. (NovaMed) revenues since the date of the acquisition on April 18, 2011. For the first quarter ending March 31, 2012, ZADAXIN revenues increased 37% to $29.8 million compared to revenues for the same period in the prior year of $21.7 million, and revenues attributable to the primary care and oncology product lines were $9.4 million.

On a pro forma basis, assuming NovaMed had been acquired on January 1, 2011, revenues for the quarter ended March 31, 2012 would have been $39.2 million compared to $28.2 million for the same period in the prior year, an increase of $11.0 million.

"We are pleased to report that SciClone delivered a strong first quarter 2012 performance with 37% ZADAXIN revenue growth year over year, clearly growing ahead of the market. All our key products, ZADAXIN, Depakine® and Aggrastat®, contributed to this excellent start for 2012," said Friedhelm Blobel, Ph.D., SciClone President and Chief Executive Officer. "We recently marked the one-year anniversary of the SciClone-NovaMed acquisition, which was an occasion to celebrate the significant accomplishments we've made integrating our two companies. Our sales and marketing focused China team, which now includes approximately 850 professionals, has greatly enhanced our ability to expand commercial efforts more deeply and widely throughout the China market, resulting in the increasing market uptake of our expanded product portfolio. We believe we have created a broad foundation for continuing to deliver strong financial results in 2012 and further solidifying our position within the top tier of specialty pharmaceutical companies in China."

On a GAAP basis, SciClone's net income for the first quarter of 2012 was $8.7 million, compared with $3.8 million for the same period in the prior year, or $0.15 per share on both a basic and diluted basis for the three months ended March 31, 2012, compared with $0.08 per share on both a basic and diluted basis for the same period in the prior year.

SciClone's non-GAAP net income for the first quarter of 2012 was $9.6 million, compared with non-GAAP income of $4.9 million for the same period in the prior year, or $0.17 and $0.16 per share on a basic and diluted basis, respectively, for the three months ended March 31, 2012, compared with $0.10 per share on both a basic and diluted basis for the same period in the prior year. Basic and diluted earnings per share for the 2012 period reflect the issuance of 8.3 million shares of common stock as part of the acquisition of NovaMed in April 2011.

SciClone believes this non-GAAP information is useful for investors, taken in conjunction with SciClone's GAAP financial statements, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of SciClone's operating results as reported under GAAP. The non-GAAP calculations and reconciliation to comparable GAAP measures were derived principally as a result of the NovaMed acquisition and are provided in the accompanying table titled "Reconciliation of GAAP to Non-GAAP Net Income."

Research and development (R&D) expenses for the first quarter of 2012 totaled $3.4 million, compared with $3.1 million for the same period in the prior year. Following the Company's announcement on March 2, 2012 regarding the futility of our SCV-07 clinical development program in oral mucositis, the Company has taken certain steps to reduce its future US-based clinical development expenses this year and expects further substantial decreases in R&D expenses in 2013. The increase in R&D for the quarter was primarily related to severance costs associated with the discontinuation of the Company's SCV-07 program, and to a lesser extent to the addition of NovaMed's research and development expenses since its acquisition in April 2011, offset partially by a decrease in third-party expenses related to the discontinuance of our US-based clinical development programs.

Sales and marketing expenses for the first quarter of 2012 were $17.6 million, compared with $5.2 million for the same period in the prior year. The increase of $12.4 million was primarily a result of the addition of approximately 450 sales and marketing employees through the acquisition of NovaMed in April 2011, as well as the additional expansion of the Company's sales team by approximately 100 sales representatives in the fourth quarter of last year, which significantly expanded SciClone's sales and marketing capabilities. The Company now has a combined sales organization comprised of approximately 850 sales and marketing focused professionals in China.

General and administrative expenses for the first quarter of 2012 were $4.0 million, compared with $6.0 million for the same period in the prior year. The decrease in 2012 was primarily due to lower professional services fees related to the Company's FCPA investigation, class action and derivative lawsuits, and professional expenses in connection with the NovaMed acquisition, partially offset by increases in general and administrative expenses attributable to NovaMed operations.

At March 31, 2012, cash and investments totaled $74.9 million, compared with $67.0 million at December 31, 2011. The increase in SciClone's cash balance was primarily due to the cash generated by the Company's commercial operations, partially offset by $1.1 million used in the first quarter for the repurchase of SciClone stock.

Conference Call Today

SciClone is hosting a conference call today at 4:30 pm ET to provide a financial update. The call will be hosted by Friedhelm Blobel, Ph.D., President and CEO, Gary Titus, Senior Vice President and CFO.

866 730.5768 (U.S./Canada)
857 350.1592 (International)
Passcode: 27284305

888 286.8010 (U.S./Canada)
617 801.6888 (International)
Passcode: 13769826
(Replay available from Wednesday, May 9, 2012, at 6:30 pm ET until 11:59 pm ET on Wednesday, May 16, 2012)

The conference call will contain forward-looking statements. Interested parties who wish to listen to the webcast should visit the Investor Relations section of SciClone's website at The information provided on the teleconference is accurate only at the time of the conference call, and SciClone will take no responsibility for providing updated information except as required by law.

About SciClone

SciClone Pharmaceuticals is a revenue-generating, profitable, specialty pharmaceutical company with a substantial commercial business in China and a product portfolio of therapies for oncology, infectious diseases and cardiovascular, urological, respiratory, and central nervous system disorders. SciClone's ZADAXIN® (thymalfasin) is approved in over 30 countries and may be used for the treatment of hepatitis B (HBV), hepatitis C (HCV), and certain cancers, and as a vaccine adjuvant, according to the local regulatory approvals. Besides ZADAXIN, SciClone markets about 15 mostly partnered products in China, including Depakine®, the most widely prescribed broad-spectrum anti-convulsant in China; Tritace®, an ACE inhibitor for the treatment of hypertension; Stilnox®, a fast-acting hypnotic for the short-term treatment of insomnia (marketed as Ambien® in the US); and Aggrastat®, a recently-launched interventional cardiology product. SciClone is also pursuing the registration of several other therapeutic products in China. SciClone is headquartered in Foster City, California. For additional information, please visit

Forward-Looking Statements

This press release contains forward-looking statements regarding expected financial results and expectations. Readers are urged to consider statements that include the words "may," "will," "would," "could," "should," "might," "believes," "estimates," "projects," "potential," "expects," "plans," "anticipates," "intends," "continues," "forecast," "designed," "goal," "unaudited," "approximately" or the negative of those words or other comparable words to be uncertain and forward-looking. These statements are subject to risks and uncertainties that are difficult to predict and actual outcomes may differ materially. These include risk and uncertainties relating to: the course, cost and outcome of regulatory matters, including pricing decisions by authorities in China; the on-going regulatory investigations; the Company's ability to execute on its goals in China and on its objectives for revenue in fiscal 2012; the challenges presented by integrating an acquired business into existing operations; the variability in earnings on a GAAP basis that may result from non-cash charges related to the NovaMed acquisition; the dependence on third party license, promotion or distribution agreements including the need to renew such agreements; operating an international business; the clinical trial process, including the regulatory approval and the process of initiating trials at, and enrolling patients at, clinical sites; the effect of changes in its practices and policies related to the Company's compliance programs. SciClone cannot predict the timing or outcome of the SEC and DOJ investigations, or of the level of its efforts required to cooperate with those investigations, however the Company has incurred substantial expenses in connection with the investigations and related litigation and expects to incur additional expense and the investigations could result in fines and further changes in its internal control or other remediation measures that could adversely affect its business. Please also refer to other risks and uncertainties described in SciClone's filings with the SEC. All forward-looking statements are based on information currently available to SciClone and SciClone assumes no obligation to update any such forward-looking statements.

Ambien, Depakine, Stilnox and Tritace are registered trademarks of Sanofi and/or its affiliates.

Aggrastat is a registered trademark of Medicure International Inc. in the United States, and Iroko Cardio LLC in numerous other countries.

SciClone, SciClone Pharmaceuticals, the SciClone Pharmaceuticals design, the SciClone logo and ZADAXIN are registered trademarks of SciClone Pharmaceuticals, Inc. in the United States and numerous other countries.

                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS                   (in thousands, except per share amounts)                                                        Three Months Ended                                                            March 31,                                                    ------------------------                                                        2012         2011                                                    -----------  -----------  Net revenues:   Product sales                                    $    31,258  $    21,662   Promotion services                                     7,905           --                                                    -----------  -----------     Total revenues, net                                 39,163       21,662  Operating expenses:   Cost of product sales                                  4,941        3,103   Sales and marketing                                   17,640        5,228   Amortization of acquired intangible assets,    related to sales and marketing                          884           --   Research and development                               3,393        3,109   General and administrative                             3,961        5,958   Contingent consideration*                               (916)          --                                                    -----------  -----------     Total operating expenses                            29,903       17,398                                                    -----------  -----------  Income from operations                                   9,260        4,264  Non-operating income (expense):   Interest income                                           30           20   Interest expense                                         (55)         (57)   Other (expense) income, net                               (1)          15                                                    -----------  ----------- Income before provision for income tax                   9,234        4,242 Provision for income tax                                   554          393                                                    -----------  ----------- Net income                                         $     8,680  $     3,849                                                    ===========  ===========  Basic net income per share                         $      0.15  $      0.08 Diluted net income per share                       $      0.15  $      0.08  Weighted average shares used in computing:   Basic net income per share                            57,701       48,020   Diluted net income per share                          59,691       50,402                         UNAUDITED SELECTED BALANCE SHEET DATA                                (in thousands)                                                     March 31,    December 31,                                                       2012          2011                                                  ------------- -------------  Cash and investments                             $      74,855 $      67,018 Accounts receivable                                     42,056        42,226 Inventories                                              8,518         8,813 Intangible assets, net                                  44,428        45,185 Goodwill                                                32,074        31,973 Total assets                                           206,997       200,326 Total current liabilities                               24,114        25,284 Contingent consideration                                14,484        15,400 Deferred tax liabilities                                 8,351         8,715 Borrowing on line of credit                              2,500         2,500 Total shareholders' equity                             159,649       150,458                     RECONCILIATION OF GAAP TO NON-GAAP NET INCOME                   (in thousands, except per share amounts)                                  (unaudited)                                                       Three Months Ended                                                           March 31,                                                 ----------------------------                                                      2012           2011                                                 -------------  -------------  GAAP net income                                 $       8,680  $       3,849 Non-GAAP adjustments:   Employee stock-based compensation                       922            525   Contingent consideration                               (916)            --   Amortization of acquired intangible assets              884             --   Acquisition related costs                                --            562                                                 -------------  -------------     Non-GAAP net income                         $       9,570  $       4,936                                                 =============  =============   Non-GAAP basic net income per share             $        0.17  $        0.10 Non-GAAP diluted net income per share           $        0.16  $        0.10  Weighted average shares used in computing: GAAP and Non-GAAP basic net income per share           57,701         48,020 GAAP and Non-GAAP diluted net income per share         59,691         50,402 

SciClone management uses these non-GAAP financial measures to monitor and evaluate the Company's operating results and trends on an on-going basis and internally for operations, budgeting and financial planning purposes. SciClone believes the non-GAAP information is useful for investors by offering them the ability to better understand how management evaluates the business. These non-GAAP measures have limitations, however, because they do not include all items of income and expenses that affect SciClone. These non-GAAP financial measures that management uses are not prepared in accordance with, and should not be considered in isolation of, or as an alternative to, measurements required by GAAP.

SciClone's non-GAAP financial measures exclude the following items from GAAP net income and net income per share:

  • Employee stock-based compensation. The effects of non-cash employee stock-based compensation.
  • *Contingent consideration. The contingent consideration related to the acquisition of NovaMed is re-measured each reporting period and the change in fair value is recorded as an adjustment to operating expense. SciClone's non-GAAP financial measure excludes the change in fair value of the liability for contingent consideration in connection with the acquisition of NovaMed.
  • Amortization of acquired intangible assets. We recorded intangible assets in connection with the acquisition of NovaMed. The amortization of these intangible assets is excluded from SciClone's non-GAAP financial measure.
  • Acquisition related costs. We incurred certain one-time acquisition costs related to the acquisition of NovaMed. The effects of these acquisition related costs are excluded from SciClone's non-GAAP financial measure.

No comments: