- 2016 consolidated revenue of $816.2
million
- 2016 GAAP net loss from continuing operations of
$1,314.1 million
- 2016 adjusted EBITDA1 of $468.1 million
- Fourth quarter consolidated revenue of $170.4 million
- Fourth quarter adjusted EBITDA1 of $80.5 million
- Company establishes 2017 objectives focused on stabilizing
the business
- Concurrently developing long-term growth strategy
- Appointed Allan Oberman as
CEO
OAKVILLE, ON, March 15, 2017 /CNW/ - Concordia International
Corp. ("Concordia" or the "Company") (NASDAQ: CXRX) (TSX: CXR), an
international specialty pharmaceutical company focused on generic
and legacy pharmaceutical products, today announced its financial
and operational results for the three and twelve months ended
December 31, 2016. All financial
references are in U.S. dollars unless otherwise noted.
"Our 2016 results represent the culmination of a challenging and
transitional year for Concordia," said Allan Oberman, Chief Executive Officer of
Concordia. "The ongoing impact of financial and industry headwinds
on the business, and the resulting erosion to our stakeholder
value, have necessitated a reassessment of our business model. We
are working diligently to stabilize our business and define our
long-term growth strategy. These efforts in 2017 are focused on
five key business priorities: strengthening our operational
execution, enhancing our financial management, expanding our
product portfolio, stakeholder outreach, and developing a
comprehensive long-term growth strategy. Despite the significant
challenges facing our business, I am encouraged by what I have seen
in my first few months at Concordia. I look forward to continuing a
deep review of the business and expect to provide a more detailed
growth strategy in the second half of the year."
Fourth Quarter 2016 Financial Results and Recent Events
- Consolidated revenue of $170.4
million, a decrease of 8.1% compared with the third quarter
of 2016.
- GAAP net loss includes fourth quarter impairment charges of
$562.1 million, and GAAP loss per
share of $13.00. The impairment
charges consisted of $306.9 million
related to the Company's North
America segment product portfolio and $255.2 million related to the Company's
International segment product portfolio.
- Adjusted EBITDA1 of $80.5
million and adjusted earnings per share1 of
$0.13, includes a charge of
$4.5 million of previously
capitalized research and development expenses related to the
Company's phase 3 trial for Photodynamic Therapy with
Photofrin®.
- Reported Concordia International segment results in the fourth
quarter that were 1.3% higher on a constant currency
basis2 compared to the third quarter of 2016, increasing
from £104.6 million to £106.0 million in the period.
- Total cash and cash equivalents of $397.9 million as of December 31, 2016. The Company disclosed on
February 1, 2017, that it made a cash
payment of approximately £73.5 million to Cinven6
pursuant to the terms of the share purchase agreement to acquire
the Company's International segment. During the year ended
December 31, 2016, the Company
generated cash flows from operating activities of $408.3 million versus $122.0 million in 2015.
Edward Borkowski, Chief Financial
Officer of Concordia, commented: "During the fourth quarter, our
North American business continued to be challenged. We remain
focused on stabilizing this segment, while evaluating opportunities
to further leverage and diversify our International segment. As
part of the ongoing strategic assessment of the business, we are
evaluating all aspects of the Company. We have launched near-term
initiatives that we believe will improve both working capital and
operating efficiencies. Furthermore, we have expanded our
disclosure regarding the Company's liquidity and capital structure
in our financial statements. Lastly, considering the industry
headwinds the Company is facing, coupled with our efforts to
stabilize the business while creating a long-term growth strategy,
we do not believe it is appropriate to issue full-year guidance for
2017, at this time. We will continue to assess the timing of
providing guidance as we make progress throughout the year."
Fourth Quarter 2016 Segment Results
- On a constant currency basis2, the Concordia
International segment delivered slightly improved results,
increasing by 1.3% in the fourth quarter of 2016 compared to the
third quarter of 2016. Concordia International segment revenue for
the fourth quarter of 2016 was $128.7
million, compared with $137.4
million in the third quarter of 2016, representing a 6.3%
decrease primarily due to foreign exchange translation.
- Since October 21, 2015, the
Company's International segment launched 36 products. These
products include branded and generic therapies for the treatment of
prostate cancer, pain, depression, and obesity, among other
conditions. The Company took an in-process research and development
impairment charge of $58.5 million in
the fourth quarter of 2016 relating to projects that it decided to
discontinue, or certain projects with lower future forecasts
compared with those at the time of the Concordia International
acquisition.
- Concordia North America segment revenue of $39.3 million in the fourth quarter of 2016
compared to $45.5 million in the
third quarter of 2016. The decrease was due to competitive market
pressures as further described below.
- Orphan Drug segment revenue of $2.4
million in the fourth quarter of 2016, compared with
$2.6 million in the third quarter of
2016.
Financial Results
(in $000s,
from continuing
operations)
|
Year
Ended
December 31,
2016
|
Year
Ended
December 31,
2015
|
Revenue
|
$816,159
|
$394,224
|
Gross
profit
|
$594,957
|
$299,930
|
Adjusted gross
profit1
|
$616,369
|
$333,862
|
Operating income
(loss), continuing operations
|
($942,307)
|
$80,451
|
Net income (loss),
continuing operations
|
($1,314,093)
|
($29,425)
|
Earnings (loss) per
share, continuing operations – basic
|
($25.76)
|
($0.81)
|
Earnings (loss) per
share, continuing operations – diluted
|
($25.76)
|
($0.81)
|
Adjusted earnings per
share1, continuing operations – diluted
|
$3.56
|
$4.38
|
Adjusted
EBITDA1
|
$468,144
|
$265,687
|
Cash and cash
equivalents
|
$397,917
|
$155,448
|
Consolidated Operating Results
Revenue for the year ended December 31,
2016 increased by $421.9
million, or 107%, compared to the corresponding period in
2015. This increase was primarily due to a $441.8 million increase in revenue for the year
from the Concordia International segment acquired on October 21, 2015 and, therefore, was only
included in the comparative period for a portion of the fourth
quarter of 2015. The increase was mainly offset by a $20.1 million decrease in revenue from the
Concordia North America segment as a result of generic product
launches and other competitive marketplace pressures associated
with the Concordia North America product portfolio.
Gross profit for the year ended December
31, 2016 increased by $295.0
million, or 98%, compared to the corresponding period in
2015. This increase was primarily due to a $318.5 million increase in gross profit for the
year from the Concordia International segment acquired on
October 21, 2015 and, therefore, was
only included in the comparative period for a portion of the fourth
quarter of 2015. The increase was partially offset by a
$21.9 million decrease in gross
profit from the Concordia North America segment. The gross profit
decrease within the Concordia North America segment was larger than
the revenue decrease primarily due to a higher proportion of full
year revenue being earned from lower margin authorized generic
sales. Gross profit in both 2016 and 2015 was negatively impacted
by non-cash inventory fair value adjustments in the amount of
$21.4 million and $33.9 million, respectively, arising as a result
of acquired inventory from business acquisitions.
Adjusted gross profit1 for the year ended
December 31, 2016, removing the
impact of the non-cash fair value adjustments, increased by
$282.5 million, or 85%, compared to
2015, which is lower than the gross profit increase due to the
higher non-cash inventory fair value adjustment in 2015.
The change in gross profit and adjusted gross profit as a
percentage of revenue in the year ended December 31, 2016 compared to 2015 reflects the
impact of lower margins within the Concordia International segment
and a change in product sales to lower margin authorized generic
products lowering gross profit margins from the Concordia North
America segment.
Operating expenses for the year ended December 31, 2016 increased by $1.3 billion, compared to 2015. Operating
expenses were higher primarily due to impairment charges of
$1.1 billion recorded during 2016, as
well as the increased size of the Company's business after the
completion of the acquisition of the portfolio of products from
Covis Pharma S.a.r.l. and Covis Injectables S.a.r.l. and the
acquisition of the Concordia International segment.
General and administrative expenses reflect costs related to
salaries and benefits, professional and consulting fees, ongoing
public company costs, travel, facility leases and other
administrative expenditures. General and administrative expenses
for the year ended December 31, 2016 increased by $26.7 million, or 90%, compared to 2015 due to
the increased size of the Company. General and administrative
expenses for the year as a percentage of revenue were 7%, compared
with 8% in 2015.
Selling and marketing expenses reflect costs incurred by the
Company for the marketing, promotion and sale of the Company's
broad portfolio of products across the Company's segments. Selling
and marketing costs for the year ended December 31, 2016
increased by $27.6 million, or 118%,
compared to 2015. These costs have increased due to the expansion
of Concordia's product portfolio from 6 core products in the first
quarter of 2015 to currently over 200 products.
Research and development costs for the year ended
December 31, 2016 increased by $25.6
million, or 171%, compared to 2015. Research and development
costs include expenses of the Concordia International segment for
product expansion efforts and costs associated with the Concordia
North America segment. In December
2016, the Company terminated a phase 3 trial for
Photodynamic Therapy with Photofrin® which resulted in $4.5 million of previously capitalized costs
being recorded as research and development expenses.
Operating (loss) income from continuing operations, for the year
ended December 31, 2016, reflects increased operating expenses
compared to 2015, primarily due to the impairment charges described
above, partially offset by the increased gross profit from the
Concordia International segment.
The current income tax expense recorded for the year ended
December 31, 2016 increased by $27.8
million, compared to 2015. Income taxes were higher
primarily due to the increased taxable income from the Concordia
International segment.
The net loss from continuing operations for the year ended
December 31, 2016 was $1.3
billion, and loss per share ("EPS") was $25.76 per share. Significant components
comprising the net loss in 2016 are impairment charges of
$1.1 billion, net foreign exchange
losses of $124.9 million, and the
deduction of other significant cash and non-cash expenses which
include, but are not limited to, amortization expense and interest
and accretion expenses.
Adjusted EBITDA1 for the year ended December 31, 2016 increased by $202.4 million, or 76%, compared to 2015
primarily due to a full year of operating results from the
Concordia International segment. Adjusted EBITDA1 in
2016 of $468.1 million, by segment,
was $177.4 million from Concordia
North America, $319.6 million from
Concordia International, offset by a loss of $9.0 million from Orphan Drugs. In addition, the
Company incurred $19.8 million of
corporate costs related to the Corporate Head Office.
As of December 31, 2016, the Company had cash of
$397.9 million and, subject to
compliance with certain incurrence covenants under the Company's
debt agreements, currently has up to $60
million available to it in a revolving credit facility
before it is subject to financial maintenance covenants under its
credit agreement.
As at December 31, 2016 and
March 15, 2017, the Company had,
respectively, 51,089,556 and 51,089,556 common shares issued and
outstanding.
Conference Call Notification
The Company will hold a conference call on Wednesday, March 15, 2017, at 8:30 a.m. ET, hosted by senior management. A
question-and-answer session will follow the corporate update.
CONFERENCE CALL
DETAILS
|
DATE:
|
Wednesday, March 15,
2017
|
TIME:
|
8:30 a.m.
ET
|
DIAL-IN
NUMBER:
|
(647) 427-7450 or
(888) 231-8191
|
TAPED
REPLAY:
|
(416) 849-0833 or
(855) 859-2056
|
REFERENCE
NUMBER:
|
69374455
|
This call is being webcast and can be accessed by going to:
http://event.on24.com/r.htm?e=1364892&s=1&k=BE872C54B2DAB39831EE64A7A2B385D5
An archived replay of the webcast will be available by clicking
the link above.
About Concordia
Concordia is a diverse, international specialty pharmaceutical
company focused on generic and legacy pharmaceutical products. The
Company has an international footprint with sales in more than 90
countries, and has a diversified portfolio of more than 200
established, off-patent products. Concordia also markets orphan
drugs through its Orphan Drugs Division, consisting of Photofrin®
for the treatment of certain rare forms of cancer.
Concordia operates out of facilities in Oakville, Ontario and, through its
subsidiaries, operates out of facilities in Bridgetown, Barbados; London, England and Mumbai, India.
Non-IFRS Measures
This press release makes reference to certain measures that are
not recognized measures under International Financial Reporting
Standards ("IFRS"). These non-IFRS measures do not have a
standardized meaning prescribed by IFRS, and are therefore unlikely
to be comparable to similar measures presented by other companies.
When used, these measures are defined in such terms as to allow the
reconciliation to the closest IFRS measure. These measures are
provided as additional information to complement those IFRS
measures by providing further understanding of the Company's
results of operations from management's perspective. Accordingly,
they should not be considered in isolation nor as a substitute for
analyses of the Company's financial information reported under
IFRS. Management uses non-IFRS measures such as EBITDA, adjusted
EBITDA, adjusted gross profit, adjusted net income and adjusted EPS
("Adjusted EPS") to provide a supplemental measure of operating
performance and thus highlight trends in the core business that may
not otherwise be apparent when relying solely on IFRS financial
measures. Management also believes that securities analysts,
investors and other interested parties frequently use non-IFRS
measures in the evaluation of issuers. Management also uses
non-IFRS measures in order to facilitate operating performance
comparisons from period to period, prepare annual operating
budgets, and to assess its ability to meet future debt service,
capital expenditure, and working capital requirements. Readers are
cautioned that the non-IFRS measures contained herein may not be
appropriate for any other purpose.
During the second quarter of 2016, the Company amended its
definition of Adjusted EBITDA and adjusted net income to adjust for
costs associated with legal settlements (net of insurance
recoveries, where applicable) and related legal costs. Management
believes that these costs should be adjusted to provide analysts,
investors and other interested parties with results reflecting the
core business. This amendment had no impact on previously issued
Non-GAAP measures as these expenses did not exist in previous
periods for the Company.
As used herein, Adjusted EPS is defined as adjusted net income
divided by the weighted average number of fully diluted shares
outstanding. Adjusted net income is defined as net income (loss)
adjusted for certain charges including costs associated with
acquisitions, restructuring initiatives, and other costs (which
includes onerous contract costs and direct costs associated with
contractual terminations), initial exchange listing expenses on the
NASDAQ, non-operating gains/losses, integration costs, legal
settlements (net of insurance recoveries) and related legal costs,
non-cash items such as unrealized gains / losses on derivative
instruments, share based compensation, fair value changes including
purchase consideration and derivative financial instruments, asset
impairments, fair value increases to inventory arising from
purchased inventory from a business combination, gains / losses
from the sale of assets and unrealized gains / losses related to
foreign exchange, noncash accretion expense and the tax impact of
the above items. Management believes Adjusted EPS is an important
measure of operating performance and cash flow, and provides useful
information to investors.
EBITDA is defined as net income / (loss) adjusted for net
interest and accretion expense, income tax expense, depreciation
and amortization. Management uses EBITDA to assess the
Company's operating performance.
Adjusted EBITDA is defined as EBITDA adjusted for certain
charges including costs associated with acquisitions, restructuring
initiatives, and other costs (which includes onerous contract costs
and direct costs associated with contractual terminations), initial
exchange listing expenses on the NASDAQ, non-operating
gains/losses, integration costs, legal settlements (net of
insurance recoveries) and related legal costs, non-cash items such
as unrealized gains / losses on derivative instruments, share based
compensation, fair value changes including purchase consideration
and derivative financial instruments, asset impairments, fair value
increases to inventory arising from purchased inventory from a
business combination, gains / losses from the sale of assets and
unrealized gains / losses related to foreign exchange. Management
uses Adjusted EBITDA, among other Non-IFRS financial measures, as
the key metric in assessing business performance when comparing
actual results to budgets and forecasts. Management believes
Adjusted EBITDA is an important measure of operating performance
and cash flow, and provides useful information to investors because
it highlights trends in the underlying business that may not
otherwise be apparent when relying solely on IFRS measures.
As used herein, adjusted gross profit is defined as gross profit
adjusted for non-cash fair value increases to cost of acquired
inventory from a business combination. Under IFRS, acquired
inventory is required to be written-up to fair value at the date of
acquisition. As this inventory is sold the fair value adjustment
represents a non-cash cost of sale amount that has been excluded in
adjusted gross profit in order to normalize gross profit for this
non-cash component. The table below sets forth the reconciliation
of net loss to EBITDA and to Adjusted EBITDA for the three and
twelve months ended December 31, 2016 and 2015:
|
|
|
|
|
|
|
|
For the years and
quarters ended (in $000's)
|
Q4-16
|
|
Q4-15
|
|
Dec 31,
2016
|
|
Dec 31,
2015
|
Net (loss) from
continuing operations
|
(663,761)
|
|
(31,455)
|
|
(1,314,093)
|
|
(29,425)
|
|
|
|
|
|
|
|
|
Interest and
accretion
|
90,793
|
|
64,295
|
|
299,741
|
|
128,142
|
Interest
income
|
(16,628)
|
|
(311)
|
|
(21,671)
|
|
(311)
|
Income
taxes
|
(22,061)
|
|
(24,444)
|
|
(33,852)
|
|
(22,011)
|
Depreciation
|
512
|
|
372
|
|
1,939
|
|
477
|
Amortization of
intangible assets
|
41,148
|
|
41,630
|
|
182,819
|
|
75,810
|
EBITDA
|
(569,997)
|
|
50,087
|
|
(885,117)
|
|
152,682
|
Impairments
|
562,105
|
|
—
|
|
1,132,243
|
|
—
|
Fair value
adjustment to acquired inventory
|
394
|
|
33,932
|
|
21,412
|
|
33,932
|
Acquisition
related, restructuring and other
|
20,309
|
|
37,560
|
|
35,968
|
|
57,207
|
Share-based
compensation
|
3,438
|
|
5,967
|
|
30,753
|
|
16,198
|
Fair value changes
of purchase consideration and derivatives
|
(20,599)
|
|
(1,343)
|
|
(6,309)
|
|
561
|
Foreign exchange
loss (gain)
|
1,403
|
|
(6,233)
|
|
(3,626)
|
|
4,056
|
Unrealized foreign
exchange loss
|
82,672
|
|
—
|
|
128,574
|
|
—
|
Legal settlements
and related legal costs
|
783
|
|
—
|
|
14,246
|
|
—
|
Exchange listing
expenses
|
—
|
|
151
|
|
—
|
|
1,051
|
Adjusted
EBITDA
|
80,508
|
|
120,121
|
|
468,144
|
|
265,687
|
The table below sets forth the reconciliation of net income
(loss) to adjusted net income and Adjusted EPS for the years ended
December 31, 2016 and December 31, 2015 and each
fiscal-year quarter:
|
|
|
|
|
|
|
|
|
|
|
In $000's, except
per share amounts
|
FY
2016
|
Q4-2016
|
Q3-2016
|
Q2-2016
|
Q1-2016
|
FY
2015
|
Q4-2015
|
Q3-2015
|
Q2-2015
|
Q1-2015
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of fully diluted shares (5)
|
51,798,382
|
51,623,190
|
51,862,590
|
52,081,161
|
51,762,381
|
37,457,561
|
49,752,148
|
35,248,353
|
33,950,472
|
30,584,951
|
Net income (loss),
continuing operations
|
(1,314,093)
|
(663,761)
|
(75,147)
|
(570,384)
|
(4,801)
|
(29,425)
|
(31,455)
|
1,496
|
(3,252)
|
3,786
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
Fair value
adjustment to acquired inventory
|
21,412
|
394
|
1,506
|
869
|
18,643
|
33,932
|
33,932
|
—
|
—
|
—
|
Share-based
compensation
|
30,753
|
3,438
|
10,069
|
8,889
|
8,357
|
16,198
|
5,917
|
5,264
|
4,120
|
897
|
Exchange listing
costs
|
—
|
—
|
—
|
—
|
—
|
1,051
|
151
|
326
|
574
|
—
|
Acquisition,
restructuring and other
|
35,968
|
20,309
|
4,251
|
7,860
|
3,548
|
57,207
|
37,560
|
6,691
|
10,102
|
2,854
|
Depreciation
|
1,939
|
512
|
528
|
469
|
430
|
477
|
372
|
33
|
30
|
42
|
Amortization of
intangible assets
|
182,819
|
41,148
|
42,715
|
52,361
|
46,595
|
75,810
|
41,630
|
14,260
|
14,885
|
5,035
|
Impairments
|
1,132,243
|
562,105
|
3,062
|
567,076
|
—
|
—
|
—
|
—
|
—
|
—
|
Foreign exchange
losses (gains)
|
124,948
|
84,075
|
55,666
|
(7,816)
|
(6,977)
|
4,056
|
(6,233)
|
5,445
|
7,802
|
(2,958)
|
Fair value changes
of purchase consideration and derivatives
|
(6,309)
|
(20,599)
|
(323)
|
6,288
|
8,325
|
561
|
(1,343)
|
287
|
984
|
633
|
Interest
accretion
|
30,064
|
7,453
|
7,348
|
7,692
|
7,571
|
34,409
|
9,802
|
16,251
|
2,541
|
5,815
|
Legal settlement
and related legal cost (4)
|
14,246
|
783
|
—
|
13,463
|
—
|
—
|
—
|
—
|
—
|
—
|
Tax adjustments
(3)
|
(69,819)
|
(29,125)
|
(14,047)
|
(15,052)
|
(11,595)
|
(30,341)
|
(28,877)
|
(1,885)
|
(39)
|
460
|
Adjusted net
income, continuing operations
|
184,171
|
6,732
|
35,628
|
71,715
|
70,096
|
163,935
|
61,456
|
48,168
|
37,747
|
16,564
|
Adjusted EPS
diluted, continuing operations
|
3.56
|
0.13
|
0.69
|
1.38
|
1.35
|
4.38
|
1.24
|
1.37
|
1.11
|
0.54
|
Notice regarding future-oriented financial
information:
To the extent any forward-looking statements or forward-looking
information in this press release constitutes future-oriented
financial information or financial outlooks within the meaning of
securities laws, such information is being provided to demonstrate
the potential financial performance of Concordia and readers are
cautioned that this information may not be appropriate for any
other purpose and that they should not place undue reliance on such
future-oriented financial information and financial outlooks.
Future-oriented financial information and financial outlooks, as
with forward-looking statements and forward-looking information
generally, are, without limitation, based on the assumptions and
subject to the risks set out below under "Notice regarding
forward-looking statements".
Notice regarding forward-looking statements:
This press release includes forward-looking statements within
the meaning of the United States Private Securities Litigation
Reform Act of 1995 and forward-looking information within the
meaning of Canadian securities laws, regarding Concordia and its
business, which may include, but are not limited to, statements
with respect to Concordia's 2017 objectives and priorities, the
development of a long term growth strategy (and the timing
thereof), the stabilization of Concordia's business, leveraging
Concordia's International segment, diversifying Concordia's
business, the improvement of working capital and liquidity based on
near term initiatives and efficiencies launched by the Company, the
assessment of providing guidance and the timing thereof,
Concordia's financial performance (including the performance of its
operating segments), the ability of Concordia to execute and
deliver on business plans and growth strategies, the ability to
drive long-term shareholder value, the implementation of actions to
manage competitive challenges, the Company taking actions to
rebuild value for stakeholders (and the ability of Concordia to
rebuild value for its stakeholders), Concordia's ability to service
its debt obligations and meet its other obligations in 2017 and
beyond, optimism about Concordia's future, the growth of Concordia
and the rate of revenue growth, the sources of revenue growth, the
stability of Concordia's business (including, without limitation,
with respect to its business in certain jurisdictions), the
diversification of the Company's geographic and therapeutic
platform, product lines and/or sales channels, Concordia's ability
to expand globally, the intention to launch products, success of
product launches, Concordia's international pipeline of products,
Concordia's revenue by geography, expected debt levels and
leverage, free cash flows, Concordia's debt structure (including
its flexibility) and the ability to pay down debt, expected sources
of funds (including expected levels of cash on hand and the ability
to draw on the Company's revolving facility), future growth of the
Company (including, without limitation, the Company's expansion
globally), the ability to pay certain debt and other obligations of
Concordia, the ability to use the Company's expected cash flow and
cash on hand to pay certain future obligations (including, without
limitation, debt obligations), the Company's cash on hand and cash
flows being sufficient to meet the Company's liquidity needs,
success of product launches, concentration of Concordia's business,
cash on hand after satisfying obligations during 2016 and 2017, the
performance of Concordia's products and segments, the
revenue-generating capabilities and/or potential of Concordia's
assets, Concordia's financial strength, the continued and/or
expected profitability of Concordia's products and/or services, the
sales and/or demand for Concordia's products, the deployment of
cash towards value creating initiatives or debt repayment
(including to fund future acquisitions and the launch of pipeline
products, and settle debt and other obligations as they become
due), the expansion into new indications and new markets for
Concordia's existing and/or future products, Concordia's ability to
evaluate growth opportunities on a global scale (and the
availability of such opportunities), the ability to expand existing
sales of Concordia's products in certain markets, market
opportunities for Concordia's products, Concordia's ability to
provide patients with safe and efficacious medicines, the safety
and efficacy of Concordia's products, the ability to obtain
necessary approvals, the approval and development of Photofrin® as
a new treatment for certain forms of cancer, the ability of
Photofrin® to combat certain forms of cancer, enrollment of
patients into clinical trials, the outcomes and success of clinical
trials, the adoption of Photofrin® in certain geographic regions
and other factors. Often, but not always, forward-looking
statements and forward-looking information can be identified by the
use of words such as "plans", "is expected", "expects",
"scheduled", "intends", "contemplates", "anticipates", "believes",
"proposes" or variations (including negative and grammatical
variations) of such words and phrases, or state that certain
actions, events or results "may", "could", "would", "might" or
"will" be taken, occur or be achieved. Such statements are based on
the current expectations of Concordia's management, and are based
on assumptions and subject to risks and uncertainties. Although
Concordia's management believes that the assumptions underlying
these statements are reasonable, they may prove to be incorrect.
The forward-looking events and circumstances discussed in this
press release may not occur by certain specified dates or at all
and could differ materially as a result of known and unknown risk
factors and uncertainties affecting Concordia, including risks
relating to Concordia's inability to stabilize its business,
Concordia's inability to develop a long term strategic plan or
being delayed in developing such plan, cash on hand and cash flows
from operations being insufficient to meet Concordia's liquidity
needs, which could result in Concordia having to refinance or
restructure its debt, sell assets or seek to raise additional
capital, which may be at less favourable terms, the inability to
implement Concordia's objectives and priorities for 2017, which
could result in financial strain on the Company and continued
pressure on the Company's business, Concordia's securities, risks
associated with developing new product indications, increased
indebtedness and leverage, the inability to generate cash flows,
revenues and/or stable margins, the inability to grow organically,
the inability to repay debt and/or satisfy future obligations
(including, without limitation, earn out obligations), risks
associated with Concordia's outstanding debt, risks associated with
the geographic markets in which Concordia operates and/or
distributes its products, risks associated with fluctuations in
exchange rates (including, without limitation, fluctuations in
currencies), risks associated with the use of Concordia's products
to treat certain diseases, the pharmaceutical industry and the
regulation thereof, the failure to comply with applicable laws,
risks relating to distribution arrangements, possible failure to
realize the anticipated benefits of acquisitions and/or product
launches (including the product launches described herein), risks
associated with the integration of assets and businesses into
Concordia's business, product launches (including, without
limitation, unsuccessful product launches), the inability to launch
products, the fact that historical and projected financial
information may not be representative of Concordia's future
results, the failure to obtain regulatory approvals (including,
without limitation, with respect to Photofrin® as a new treatment
for certain forms of cancer), economic factors, market conditions,
acquisition opportunities, risks associated with the acquisition
and/or launch of pharmaceutical products (including the product
launches described herein), risks regarding clinical trials and/or
patient enrollment into clinical trials, the equity and debt
markets generally, risks associated with growth and competition
(including, without limitation, with respect to Concordia's niche,
hard-to-make products and Concordia's key products in its
International and North America
segments (including the competitive pressures on some of the
products described herein)), general economic and stock market
conditions, risks associated with the United Kingdom's exit from the European Union
(including, without limitation, risks associated with regulatory
changes in the pharmaceutical industry, changes in cross-border
tariff and cost structures and the loss of access to the European
Union global trade markets), risks associated with regulatory
investigations (including investigations by competition authorities
with respect to the Company's operations), risks related to the
introduction of new legislation, or amendments to existing
legislation, in the jurisdictions in which Concordia carries on
business, risks related to patent infringement actions, the loss of
intellectual property rights, risks associated with class action
litigation, risks associated with Concordia's inability to defend
itself in certain legal actions or being found to have violated
certain laws (including, without limitation, the regulatory
investigations and class actions which Concordia is currently
subject to), which may require Concordia to make certain payments
in respect of such legal matters or which may result in certain
fines being levied against Concordia, risks and uncertainties
detailed from time to time in Concordia's filings with the
Securities and Exchange Commission and the Canadian Securities
Administrators and many other factors beyond the control of
Concordia. Although Concordia has attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in
forward-looking statements and forward-looking information, there
may be other factors that cause actions, events or results to
differ from those anticipated, estimated or intended. No
forward-looking statement or forward-looking information can be
guaranteed. Except as required by applicable securities laws,
forward-looking statements and forward-looking information speak
only as of the date on which they are made and Concordia undertakes
no obligation to publicly update or revise any forward-looking
statement or forward-looking information, whether as a result of
new information, future events, or otherwise.
1 Management uses non-IFRS measures such as EBITDA,
Adjusted EBITDA, adjusted net income, adjusted gross profit, net
debt/EBITDA and Adjusted EPS to provide a supplemental measure of
operating performance. Please refer to the "Non-IFRS Measures"
section of this press release for further information.
2 On a constant currency basis, excludes the impact
of foreign exchange fluctuations between GBP/USD during the fourth
quarter of 2016.
3 The Company has included in tax adjustments the
current and deferred income taxes presented in the consolidated
statements of income (loss) to the extent that these relate to
adjustments made to net income (loss) from continuing
operations. The income taxes presented in the consolidated
statements of income (loss), after including the tax adjustments,
represents the Company's estimate of the income taxes in respect of
adjusted net income ("Tax on Adjusted Net Income"). Tax on
Adjusted Net Income does not represent the Company's expectation of
its current cash income tax obligations as such obligations are
further impacted by: (i) the tax impact of certain adjustments made
to net income (loss) from continuing operations but which do impact
current cash income tax obligations, e.g., the tax impact of
adjustments for stock based compensation, depreciation and
amortization; and (ii) when such income tax obligations are
required to be paid, which is a function of the laws applicable in
the jurisdiction to which the payment is due.
4 Represents legal settlements of $13.2 million and $1.0
million of related legal representation costs.
5 Weighted average number of fully diluted share
calculation for the fourth quarter of 2015 includes 8,000,000
common shares of Concordia issued on September 30, 2015, pursuant to a prospectus
offering and in connection with the acquisition of the Concordia
International segment. Net income from Concordia International has
been included since the date of acquisition on October 21, 2015. The impact to adjusted EPS if
the offering had occurred on October 21,
2015, the closing date, would be an additional $0.05 cents per common share for the fourth
quarter of 2015
6 In this press release 'Cinven' means, depending on
the context, any of or collectively, Cinven Group Limited, Cinven
Partners LLP, Cinven (LuxCo1) S.A., Cinven Capital Management (V)
General Partner Limited and their respective Associates (as defined
in the Companies Act 2006) and/or funds managed or advised by the
group.
SOURCE Concordia International Corp.