- Reported second quarter revenue of $160.8 million
- Reported a net loss from operations of $1.01 billion, primarily due to $987.1 million of impairments recorded on
goodwill, product rights and other intangible assets
- Reported second quarter adjusted EBITDA of $81.8 million
- Generated cash flow from operations of $155.6 million in the first six months of
2017
- Subsequent to quarter end, Concordia finalized its long-term
growth strategy and intends to communicate it by mid September 2017
- Concordia today announces executive leadership changes
OAKVILLE, ON, Aug. 11, 2017 /PRNewswire/ - 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
six months ended June 30, 2017. All
financial references are in U.S. dollars (USD) unless otherwise
noted.
"Our second quarter results were in line with our expectations,
which can be attributed to our business stabilization initiatives
taken to date," said Allan Oberman,
Chief Executive Officer of Concordia. "During the quarter, we also
finalized our long-term growth strategy, with the full support of
our Board of Directors. Our new long-term growth strategy, known
going forward as the DELIVER strategy, seeks to accelerate growth
by maximizing our existing assets and future market opportunities,
expanding our product portfolio, optimizing our operating platform
and strengthening our financial foundation. We look forward to
sharing the detailed initiatives that comprise the DELIVER strategy
by mid September."
Consolidated Second Quarter 2017 Financial Results and Recent
Events
- Reported revenue of $160.8
million, compared to $231.7
million for the same period in 2016 and $160.6 million for the first quarter of
2017.
- Reported second quarter adjusted EBITDA1 of
$81.8 million, compared to
$142.3 million for the same period in
2016, and $84.2 million in the first
quarter of 2017.
- Generated cash flows from operating activities of $155.6 million in the first half of 2017,
compared to $236.6 million for the
same period in 2016.
- Recorded intangible asset impairments of $446.0 million comprised of $106.9 million of intellectual property rights
within the Concordia North America segment with respect to
Donnatal®, as well as $339.1
million of total impairments within Concordia's
International segment related to a number of products including
Liothyronine Sodium, Fusidic Acid, Prednisolone and Nefopam.
- Recorded $31.6 million of
impairments related to in-process research and development.
- Recorded a $509.5 million
impairment charge on goodwill.
- As of June 30, 2017, liquidity
was substantially comprised of $301.8
million of cash and cash equivalents. Based on current
market conditions, the Company continues to believe it has
sufficient liquidity over at least the next 12 months to operate
its business and meet its debt obligations in the ordinary
course.
- As originally announced on June 21,
2017, the Company is continuing to work with Perella
Weinberg Partners LP as its lead adviser with respect to the
development of a plan and execution for an optimal capital
structure.
- Announced the appointment of David
Price as CFO and the appointments of Itzhak Krinsky and Francis (Frank) Perier, Jr. to the Company's
Board of Directors.
Second Quarter 2017 Segmental Results
North America segment revenue
of $45.5 million for three months
ended June 30, 2017 decreased by
$34.8 million or 43%, compared to the
corresponding period in 2016. The decrease was primarily due to a
$15.0 million decrease from
Plaquenil® authorized generic, a $4.7
million decrease from Nilandron®, and a $6.3 million decrease from Donnatal® as a result
of additional competitive pressures that resulted in losses of
market share. Donnatal® has continued to face pressure from a
non-FDA approved product being distributed by a competitor, and
during the second quarter of 2017, the Company became aware of the
launch of an additional competitive product to Donnatal®.
Second quarter 2017 revenue for the North America segment increased by
approximately 9% compared to first quarter 2017 revenue of
$41.8 million, primarily due to
higher volumes from Plaquenil® and Lanoxin® authorized generic.
International segment revenue of $115.3
million for the three months ended June 30, 2017 decreased by $36.1 million or 24%, compared to the
corresponding period in 2016. The decrease was partially
attributable to a $17.1 million
decrease in revenue as a result of the foreign currency impact of
the Great British Pound (GBP) weakening against the USD.
Additionally, there was a $4.3
million decrease from Prednisolone; a $3.1 million decrease from Nefopam; a
$2.9 million decrease from
Liothyronine Sodium; a $1.5 million
decrease from Hydrocortisone; a $2.9
million decrease from Trazadone; and a $1.1 million decrease from Levothyroxine Sodium.
These lower product volumes and revenues are primarily due to
competitive market pressures.
Second quarter 2017 revenue for the Concordia International
segment decreased by $3.4 million
compared to the first quarter of 2017. The sequential decline was
primarily due to additional competitive pressures on the segment's
product portfolio.
During the second quarter of 2017, the Company also became aware
of a marketing authorization granted by the Medicines &
Healthcare products Regulatory Agency in the United Kingdom for a competitive product to
Liothyronine Sodium.
Pipeline Update
During the second quarter of 2017, the Company launched three
new products into markets that have a current IMS-estimated value
of $3 million.
Concordia also has 14 products that have already been approved
or are awaiting approval. These products, if launched, are
expected to compete in markets that have a current IMS-estimated
value in excess of $100 million.
In addition, the Company currently has 26 products (compared to
8 products in the first quarter of 20l7) under development that are
anticipated to launch in the next three to five years. The
Company believes that these products, if launched, will compete in
markets that have a current IMS-estimated value in excess of
$1.5 billion.
Concordia believes that these products include several
first-to-market or early-to-market opportunities for
difficult-to-make products.
In addition, the Company has 16 products identified for
potential development that, if launched, are expected to compete in
markets that have a current IMS-estimated value in excess of
$500 million.
In total, Concordia's pipeline is comprised of more than 50
products that could compete in markets that have a current
IMS-estimated value in excess of $2
billion.
Executive Leadership Changes
Today, Concordia announced that in support of the DELIVER
strategy, Sanjeeth Pai will join
Concordia, on August 14, 2017 as
President of Concordia's North
America segment, and Sarwar
Islam will become Concordia's Chief Corporate Development
Officer, on September 1,
2017.
For the past 10 years, Sanjeeth
Pai has worked for Cardinal Health where he held a number of
senior roles, the most recent being Vice-President, Strategy,
Specialty Solutions Division. Mr. Pai has also been Vice President
and General Manager for Cardinal's VitalSource Business, and
Cardinal's Third Party Logistics Business.
Earlier in his career, Mr. Pai worked at Abbott Laboratories,
Wyeth Pharmaceuticals, and Baxter Healthcare, as well as Alpharma,
now a division of the Actavis Group.
In addition, Sarwar Islam will
join the Company as a full-time employee becoming Concordia's Chief
Corporate Development Officer effective September 1, 2017. Mr. Islam joined Concordia in
January 2017 as a strategic advisor;
his primary responsibility since then has been to assist Concordia
through the development of the DELIVER strategy.
Going forward, Mr. Islam will focus on the execution of some of
the components of the DELIVER strategy, as well as leading
Concordia's corporate development initiatives.
Mr. Islam spent the past 15 years with The Boston Consulting
Group, most recently as Partner and Managing Director, and as the
Global Head, Pharmaceutical Generics & Biosimilars practice.
During this period, Mr. Islam worked extensively across
Europe, including the UK,
Germany, France, Sweden, and the U.S.
Finally, Wayne Kreppner,
Concordia's President and Chief Operating Officer, will be leaving
Concordia effective August 31, 2017.
The Company will not be looking to fill this position after Mr.
Kreppner's departure.
"On behalf of our Board of Directors, I'd like to thank Wayne
for his leadership, dedication, and stewardship," continued
Allan Oberman. "Wayne has been part
of Concordia since shortly after its inception, and he has since
played an integral role in many of the Company's major initiatives.
I am also looking forward to working closely with Sarwar and
Sanjeeth, who both bring a strong skill set and deep industry
experience to their new roles. I believe these two individuals will
make significant contributions as we now look to execute upon the
DELIVER strategy."
Financial Results
|
Three months
ended
|
Six months
ended
|
(in $000's, except
per share data)
|
Jun 30,
2017
|
Jun 30,
2016
|
Jun 30,
2017
|
Jun 30,
2016
|
Revenue
|
160,785
|
231,712
|
321,342
|
460,247
|
Gross
profit
|
111,312
|
177,607
|
226,727
|
337,459
|
Adjusted gross
profit (1)
|
111,312
|
178,476
|
227,038
|
356,971
|
Operating loss
from continuing operations
|
(981,255)
|
(514,931)
|
(962,889)
|
(459,981)
|
Net loss from
continuing operations
|
(1,010,653)
|
(570,384)
|
(1,089,477)
|
(575,185)
|
Loss per share,
from continuing operations
|
|
|
|
|
Basic
|
(19.78)
|
(11.18)
|
(21.32)
|
(11.28)
|
Diluted
|
(19.78)
|
(11.18)
|
(21.32)
|
(11.28)
|
EBITDA
(1)
|
(903,563)
|
(454,285)
|
(846,631)
|
(345,333)
|
Adjusted EBITDA
(1)
|
81,808
|
142,344
|
166,050
|
283,192
|
Consolidated Results of Operations
Revenue for the three and six month periods ended June 30, 2017 decreased by $70.9 million, or 31%, and $138.9 million, or 30%, respectively, compared to
the corresponding periods in 2016. These decreases are due to lower
sales from both the Concordia North America and Concordia
International segments, as well as lower foreign exchange rates
impacting translated results. The Concordia North America segment
revenue for the three months ended June 30,
2017 decreased by 43% when compared to the corresponding
period in 2016, mainly due to lower volumes on key products
including Plaquenil®, Nilandron® and Donnatal®. The Concordia
International segment revenue for the three months ended
June 30, 2017 decreased by 24% when
compared to the corresponding period, of which 11% is due to the
impact of lower foreign exchange rates between USD/GBP. The
remaining decrease of 13% is due to volume declines on key products
including Liothyronine Sodium, Prednisolone and Nefopam.
Gross profit for the three and six month periods ended
June 30, 2017 decreased by $66.3
million, or 37%, and $110.7
million, or 33%, respectively, compared to the corresponding
periods in 2016 primarily due to the impact of the factors
described above. The decrease in gross profit percentage of 8% for
the three month period ended June 30,
2017, is primarily due to a change in the mix of product
sales within both the Concordia North America segment and Concordia
International segment. The decrease in gross profit percentage of
2% for the six months ended June 30,
2017 is lower than the 8% for the three month period ended
June 30, 2017, as the first quarter
of 2016 included a non-cash fair value adjustment to inventory of
$18.6 million associated with the
acquisition of the Concordia International segment.
Operating expenses for the three and six month periods ended
June 30, 2017 increased by $400.0
million, or 58%, and $392.2
million, or 49%, respectively, compared to the corresponding
periods in 2016. Operating expenses were higher primarily due to a
$420.0 million higher impairment
charge on a quarter and year-to-date basis. Excluding impairments,
operating expenses for the three and six month periods ended
June 30, 2017 decreased by $20.0
million, or 16%, and $27.9
million, or 12%, respectively, compared to the corresponding
periods in 2016. This decrease is primarily due to $13.5 million lower litigation settlements,
$6.9 million lower change in fair
value of purchase consideration, $6.4
million lower share based compensation expense and
$4.7 million lower selling and
marketing costs, partially offset by $15.1
million higher amortization expense. The decrease in
operating expenses for the six month period ended June 30, 2017, excluding impairments, is
primarily due to $13.5 million lower
litigation settlements, $15.1 million
lower change in fair value of purchase consideration, $11.8 million lower share based compensation
expense and $8.3 million lower
selling and marketing costs, partially offset by $25.2 million higher amortization
expense.
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 three month period ended June 30,
2017 increased by 4% compared to the corresponding period in
2016. This increase is due to the timing of certain general and
administration costs incurred in 2017 as compared to 2016. General
and administrative expenses for the six month period ended
June 30, 2017 decreased by 4% as a
result of the objective to minimize corporate costs as well as a
positive impact of foreign exchange rates on translated general and
administrative expenses from the Concordia International
segment.
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 three and six month periods ended
June 30, 2017 decreased by
$4.7 million, or 35%, and
$8.3 million, or 31%, respectively,
compared to the corresponding periods in 2016. These costs have
decreased primarily due to the termination of the Donnatal®
contract sales force in 2016, which has been replaced by a
co-promotion agreement with RedHill Biopharma Ltd., as well as a
positive impact of foreign exchange rates on translated selling and
marketing expenses from the Concordia International segment.
Research and development expenses reflect costs for clinical
trial activities, product development, professional and consulting
fees and services associated with the activities of the medical,
clinical and scientific affairs, quality assurance costs,
regulatory compliance and drug safety costs (Pharmacovigilence) of
the Company. Research and development costs for the three and six
month periods ended June 30, 2017
decreased by $2.4 million, or 25%,
and $3.3 million, or 18%,
respectively, compared to the corresponding periods in 2016. This
decrease is due to fewer ongoing clinical programs in 2017 compared
with 2016, including the cancellation of the cholangiocarcinoma
trial in December 2016, and the
Company moving certain external costs previously incurred within
the Concordia North America segment to the Company's operations in
Mumbai, India.
The current income tax expense recorded for the three and six
month periods ended June 30, 2017
decreased by $9.5 million and
$12.2 million, respectively, compared
to the corresponding periods in 2016. Income taxes were lower
primarily due to the impact of lower foreign exchange translation
from the Concordia International segment as well as lower taxable
income due to lower revenues compared to corresponding periods in
2016.
The net loss from continuing operations for the three and six
month periods ended June 30, 2017 was
$1,010.7 million, and $1,089.5 million, respectively, and earnings per
share loss was $19.78 and
$21.32, respectively. Significant
components comprising the net loss for the six month period ended
June 30, 2017 are an impairment
charge of $987.1 million recorded
during the second quarter of 2017, fair value losses on derivative
contracts of $48.1 million, interest
and accretion expense of $186.8
million and amortization of $124.2
million offset by gross profit of $226.7 million.
Adjusted EBITDA for the three and six month periods ended
June 30, 2017 of $81.8 million
and $166.1 million respectively,
decreased by $60.5 million, or 43%,
and $117.1 million, or 41%,
respectively, compared to the corresponding periods in 2016. The
decline is primarily due to lower sales and gross margins from both
the Concordia North America and Concordia International segments,
as well as lower foreign exchange rates impacting translated
results.
Adjusted EBITDA by segment for the three and six month periods
ended June 30, 2017 was $29.0
million and $55.6 million,
respectively, from Concordia North America and $58.1 million and $121.3
million, respectively, from Concordia International. In
addition, during the three and six month periods ended
June 30, 2017 the Company incurred $5.2
million and $10.9 million,
respectively, of Corporate costs related to the Corporate Head
Office.
As of June 30, 2017, the Company
had cash of $301.8 million. The
Company's credit agreement dated October 21,
2015 also provides for a revolving credit facility, which is
undrawn. The Company is currently not subject to financial
maintenance covenants under its credit agreement. These
financial maintenance covenants are applicable only in the event
that the aggregate principal amount of outstanding revolving loans
under the Company's credit agreement is greater than 30% of the
aggregate amount, or $60 million of
the revolving facility.
As at June 30, 2017 and
August 10, 2017 the Company had
51,112,180 and 51,143,978 common shares issued and outstanding.
Conference Call Notification
The Company will hold a conference call on Friday, August 11, 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:
|
Friday, August 11,
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:
|
50705221
|
This call is being webcast and can be accessed by going to:
http://event.on24.com/r.htm?e=1461798&s=1&k=FE95193B8C06888A3193CD0C7F86F702
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 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 are not
recognized measures under IFRS and 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 to 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 earnings per share ("Adjusted EPS") to provide
investors with supplemental information of the Company's operating
performance and thus highlight trends in the Company's 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, to assess its ability to meet
future debt service requirements, in making capital expenditures,
and to consider the business's working capital requirements.
Readers are cautioned that the non-IFRS measures contained herein
may not be appropriate for any other purpose.
As used herein, adjusted gross profit is defined as gross profit
adjusted for non-cash fair value increases to the 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.
|
|
|
|
Three months
ended
|
Six months
ended
|
For the three
months ended (in $000's)
|
Jun 30,
2017
|
Jun 30,
2016
|
Jun 30,
2017
|
Jun 30,
2016
|
Gross profit per
financial statements
|
111,312
|
177,607
|
226,727
|
337,459
|
Add back: Fair
value adjustment to acquired inventory
|
—
|
869
|
311
|
19,512
|
Adjusted Gross
profit
|
111,312
|
178,476
|
227,038
|
356,971
|
EBITDA
EBITDA is defined as net income / loss adjusted for interest and
accretion expense, interest income, income tax expense,
depreciation and amortization. Management uses EBITDA to
assess the Company's operating performance.
Adjusted EBITDA
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.
The table below sets forth the reconciliation of net loss from
continuing operations to EBITDA and to Adjusted EBITDA for the
three and six month periods ended June 30,
2017 and June 30, 2016.
|
|
|
|
Three months
ended
|
Six months
ended
|
For the three
months ended (in $000's)
|
Jun 30,
2017
|
Jun 30,
2016
|
Jun 30,
2017
|
Jun 30,
2016
|
Net loss from
continuing operations
|
(1,010,653)
|
(570,384)
|
(1,089,477)
|
(575,185)
|
|
|
|
|
|
Interest and
accretion expense
|
94,486
|
68,255
|
186,777
|
136,596
|
Interest
income
|
(18,643)
|
—
|
(37,122)
|
—
|
Income
taxes
|
(36,723)
|
(4,986)
|
(31,984)
|
(6,599)
|
Depreciation
|
500
|
469
|
988
|
899
|
Amortization of
intangible assets
|
67,470
|
52,361
|
124,187
|
98,956
|
EBITDA
|
(903,563)
|
(454,285)
|
(846,631)
|
(345,333)
|
Impairment
loss
|
987,103
|
567,076
|
987,103
|
567,076
|
Fair value
adjustment to acquired inventory
|
—
|
869
|
311
|
19,512
|
Acquisition
related, restructuring and other
|
6,167
|
7,860
|
11,383
|
11,408
|
Share-based
compensation
|
2,475
|
8,889
|
5,427
|
17,246
|
Fair value (gain)
loss on purchase consideration and derivatives
|
20,140
|
6,288
|
47,646
|
14,613
|
Foreign exchange
(gain) loss
|
188
|
(149)
|
1,178
|
(1,540)
|
Unrealized foreign
exchange (gain) loss
|
(30,702)
|
(7,667)
|
(40,367)
|
(13,253)
|
Legal settlements
and related legal costs
|
—
|
13,463
|
—
|
13,463
|
Adjusted
EBITDA
|
81,808
|
142,344
|
166,050
|
283,192
|
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 its business
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 long-term growth strategy (including
the components of the DELIVER strategy), Concordia's 2017
objectives and priorities, the development and implementation of
Concordia's long term growth strategy (and the timing of the
release thereof), the stabilization of Concordia's business, the
execution, timing and impact of Concordia's business stabilization
objectives, the experience of Messrs. Pai and Islam, the ability of
Messrs. Pai and Islam to make significant contributions to
Concordia, leveraging Concordia's International segment,
diversifying Concordia's business, Concordia's liquidity
(including, without limitation, access to the capital markets
and/or its revolving facility), the improvement of working capital
and liquidity based on near term initiatives and efficiencies
launched by the Company, 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, the number of potential product launches, the
development of new products, the timing of product launches,
success of product launches, the size and/or estimated value of the
markets in which Concordia has launched or intends to launch
products, Concordia's ability to launch first-to-market,
early-to-market or difficult-to-make products, Concordia's network
of partners, 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 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, enrollment of patients into clinical trials,
the outcomes and success of clinical trials 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
implement its long term strategic plan or being delayed in
implementing such plan, the inability of Concordia to accelerate
growth by maximizing its existing assets and future market
opportunities, the inability of Concordia to expand its product
portfolio (including, without limitation, the inability of
Concordia to launch products due to regulatory impediments or
competitive market changes), the inability of Concordia to optimize
its operating platform, changes in laws, including tax laws, that
could result in Concordia's operating platform being adversely
affected, Concordia's inability to strengthen its financial
foundation, the inability of Concordia to refinance or restructure
its debt obligations, 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, the inability of Messrs. Pai and/or Islam to make
significant contributions to Concordia, 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,
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
develop new products, the inability to launch products or the delay
in launching products, regulatory delays in product approvals, the
inability to launch first-to-market, early-to-market or
difficult-to-make products, the inability to capture a share of any
market in which Concordia has launched or intends to launch its
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 or with respect to the product launches
described herein), the FDA permitting unapproved products to remain
on the market and compete with Concordia's products (including,
without limitation, Donnatal®), economic factors, market
conditions, acquisition opportunities, risks associated with the
acquisition and/or launch of pharmaceutical products (including,
without limitation, 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 the current investigations
being undertaken 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.
SOURCE Concordia International Corp.