- 2017 revenue of $626 million
- 2017 GAAP net loss from continuing operations of $1,591 million, which includes goodwill and
intangible asset impairments totaling $1,195
million
- 2017 adjusted EBITDA1 of $315
million
- Generated cash flow from operations of $283 million in 2017 and concluded the year with
a cash balance of $327 million while
pursuing a capital structure realignment through a CBCA
proceeding
- Reported fourth quarter 2017 revenue of $150 million and fourth quarter adjusted
EBITDA1 of $71 million
- Concordia today announced the final implementation of a new
organization leadership structure designed to streamline and
enhance the execution of the Company's recently communicated,
long-term growth strategy, DELIVER
OAKVILLE, ON, March 8, 2018 /CNW/ - Concordia International
Corp. ("Concordia" or the "Company") (NASDAQ: CXRX) (TSX: CXR), an
international specialty pharmaceutical company focused on becoming
a leader in European specialty, off-patent medicines, today
announced its financial and operational results for the three and
12 months ended December 31, 2017.
All financial references are in U.S. dollars (USD) unless otherwise
noted.
"We believe that our accomplishments in 2017, which included the
development of DELIVER, our long-term growth strategy, have
positioned Concordia to have a promising 2018," said Allan Oberman, Chief Executive Officer of
Concordia. "As we make progress towards the potential realignment
of our capital structure, our global team remains focussed on
leveraging our diverse portfolio of medicines, global sales
platform, and product pipeline in order to support our aspirations
for long-term growth."
Consolidated Fourth Quarter And Fiscal 2017 Financial and
Operational Results
- Reported fourth quarter revenue of $150.2 million, compared to $170.4 million for the fourth quarter of 2016,
and $154.6 million for the third
quarter of 2017.
- GAAP net loss for the fourth quarter of $431.8 million included impairment charges of
$207.7 million. The impairments
consisted of a $44.3 million
impairment of intellectual property rights within the Concordia
North America segment with respect to Nilandron®, as well as
$163.4 million of impairments from
the Concordia International segment with respect to intellectual
property, manufacturing processes and in-process research and
development.
- Reported fourth quarter adjusted EBITDA1 of
$70.8 million, compared to
$80.5 million for the fourth quarter
in 2016, and $78.6 million in the
third quarter of 2017.
- Generated cash flows from operating activities of $283.2 million in 2017, compared to $408.3 million in 2016.
- As of December 31, 2017, the
Company's liquidity consisted of $327
million of cash and cash equivalents.
- On October 20, 2017, Concordia
announced its intention to realign its capital structure by
commencing a court proceeding under the Canada Business
Corporations Act (the "CBCA"). The CBCA is a Canadian corporate
statute that contains provisions allowing Canadian corporations to
restructure certain debt obligations. The CBCA is not a bankruptcy
or insolvency statute. Under the CBCA process, Concordia's
management continues to lead day-to-day operations and operate its
business as usual, while meeting its commitments to employees,
suppliers and customers.
Fourth Quarter 2017 Segment Results
The Company changed the composition of its reporting segments
during the first quarter of 2017. As a result, Concordia has
presented prior-period segment information to conform with the
current-period presentation by aggregating the 2016 segment
information of the Concordia North America segment with the segment
information of the 2016 Orphan Drugs segment into a single
reporting segment, entitled, 'Concordia North America'.
Concordia North America segment's fourth quarter 2017 revenue of
$36.5 million was consistent with
third quarter 2017 revenue of $36.9
million.
Revenue for the three months ended December 31, 2017 decreased by $5.2 million or 12.4 per cent compared to the
corresponding period in 2016. This decrease is attributable to
competitive pressures on products such as Donnatal® and Plaquenil®
AG.
Concordia International segment's revenue for the fourth quarter
of 2017 was $113.7 million compared
to $117.7 million in the third
quarter of the year.
This decrease is attributable to volume and price declines on
key products, including Liothyronine Sodium, and was partially
offset by the impact of the sterling strengthening against the U.S.
dollar, resulting in $1.6 million of
additional translated revenue.
Revenue for the three months ended December 31, 2017 decreased by $15.0 million or 11.7 per cent compared to the
corresponding period in 2016. The main drivers of the decrease were
primarily due to ongoing competitive market pressures, and were
partially offset by foreign currency translation gains.
Pipeline Update
During the fourth quarter of 2017, the Company launched two new
products into markets that have a current IMS estimated market
value of $10 million.
Concordia also has 17 products that have already been approved
or are awaiting approval by regulators. These products, if
launched, are expected to compete in markets that have a current
IMS estimated market value in excess of $150
million.
In addition, the Company currently has 32 products under
development that are anticipated to launch in the next three to
five years. These products, if launched, are expected to compete in
markets that have a current IMS estimated market value in excess of
$1.8 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 15 products identified for
potential development that, if launched, are expected to compete in
markets that have a current IMS estimated market value in excess of
$350 million.
Therefore, in total, Concordia's current pipeline is comprised
of more than 60 products that could compete in markets that have a
current IMS estimated market value in excess of $2 billion.
Going forward, Concordia intends to continue to evaluate
additional opportunities above and beyond the 60 products to
further increase the Company's pipeline and portfolio.
New Organization Leadership Structure
The Company today announced that Graeme
Duncan, President of Concordia's International segment, will
be leaving the organization effective June
30, 2018.
There are no plans to fill this position.
"We are grateful to Graeme for the contributions he has made to
Concordia, and wish him well in his future endeavors," said
Allan Oberman, Chief Executive
Officer of Concordia. "In alignment with DELIVER, our long-term
growth strategy, we have now fully implemented a unified
organization structure consisting of four global functions,
supporting four geographic business units. I look forward to
working more closely with these leaders and their teams as we focus
on accelerating Concordia's growth."
The following senior leaders will continue to oversee
Concordia's four geographic, commercial business units, and will
report directly to Mr. Oberman:
- Paul Burden, promoted to
Managing Director, UK and Ireland,
will continue to oversee Concordia's largest business unit (UK and
Ireland). Paul joined Concordia in
September 2016 and has served as Vice
President, Commercial Business, UK and Ireland since then.
- Simon Tucker, Vice President,
Commercial Business will continue to oversee Concordia's Rest of
World business unit.
- Sanjeeth Pai, President,
Concordia North America, will continue to oversee the Company's
North American business unit.
- Glenn Kutschera, Vice President
and General Manager, Pinnacle Biologics, will continue to oversee
the Company's commercial efforts around Photodynamic Therapy by
Photofrin® for the treatment of certain types of cancer.
These individuals and their teams will be supported by the
following global functional leaders and their respective support
teams:
- Karl Belk, Senior Vice
President, Global Pharmaceutical Operations, will continue to lead
Concordia's Global Pharmaceutical Operations, overseeing the
Company's Supply Chain, Supplier Relationships, Quality,
Regulatory, Technical and Operations divisions.
- Sarwar Islam, Concordia's Chief
Corporate Development Officer, will continue to lead the Company's
efforts in strategy, corporate development, business development,
portfolio development and mergers and acquisitions.
- David Price, Concordia's Chief
Financial Officer, will continue to lead the Company's finance,
human resources, and investor and public relations functions.
- Francesco Tallarico, Concordia's
Chief Legal Officer, will continue to lead the Company's legal and
compliance efforts.
The Company believes this streamlined management structure,
where all senior leaders report to the CEO, will ultimately help
accelerate the execution of the DELIVER strategy.
Consolidated Financial Results
|
|
|
For the year
ended
|
|
|
|
|
Dec 31,
2017
|
Dec 31,
2016
|
Revenue
|
626,169
|
816,159
|
Gross
profit
|
435,537
|
594,957
|
Gross profit
%
|
70%
|
73%
|
Adjusted gross
profit (1)
|
435,848
|
616,369
|
Adjusted gross
profit % (1)
|
70 %
|
76%
|
Total operating
expenses
|
1,600,485
|
1,537,264
|
Operating income
(loss) from continuing operations
|
(1,164,948)
|
(942,307)
|
|
|
|
Income tax
recovery
|
(36,757)
|
(34,801)
|
Net loss from
continuing operations
|
(1,590,735)
|
(1,314,093)
|
|
|
|
Loss per share,
from continuing operations
|
|
|
Basic
|
(31.10)
|
(25.76)
|
Diluted
|
(31.10)
|
(25.76)
|
|
|
Loss per share,
including discontinued operations
|
|
Basic
|
(31.10)
|
(25.79)
|
Diluted
|
(31.10)
|
(25.79)
|
|
|
EBITDA
(1)
|
(953,613)
|
(885,117)
|
Adjusted EBITDA
(1)
|
315,410
|
468,144
|
Consolidated Results of Operations
Revenue for the year ended December 31, 2017 decreased by
$190.0 million, or 23 per cent,
compared to 2016. This decrease was due to lower sales from both
the Concordia North America and Concordia International segments,
as well as unfavorable foreign exchange rate movements, compared to
the corresponding period in 2016.
Revenues were lower primarily due to lower volumes, mainly as a
result of new market entrants on a number of the Company's
products. Concordia North America segment revenue for the year
ended December 31, 2017 decreased by $97.9 million or 38 per cent when compared to
2016, mainly as a result of lower volumes on key products,
including Plaquenil® AG, Donnatal® and Nilandron®.
Concordia International segment revenue for the year ended
December 31, 2017 decreased by $92.1
million or 17 per cent primarily due to volume and price
declines on key products, including Prednisolone, Liothyronine
Sodium and Fusidic Acid.
Gross profit for the year ended December 31, 2017 decreased
by $159.4 million or 27 per cent,
compared to 2016 primarily due to the revenue decreases described
above. The decrease in gross profit as a percentage of revenue for
the year ended December 31, 2017 compared to 2016 is primarily
due to changes in product mix within the Concordia North America
and Concordia International segments.
Operating expenses for the year ended December 31, 2017
increased by $63.2 million, or four
per cent compared to 2016. Operating expenses were higher primarily
due to $62.5 million higher
impairment charges recorded during 2017 and $43.6 million higher amortization of intangible
assets, partially offset by $22
million lower share-based compensation, $14.2 million lower litigation settlements and
$12.9 million lower selling and
marketing costs.
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, 2017 decreased by $5.8 million or 10 per cent compared to 2016.
This decrease is a result of the Company's objective to reduce
operating costs across the business.
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, 2017
decreased by $12.9 million or 25 per
cent compared to 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. Sales and marketing expenses in 2017 within the
Concordia North America segment have decreased by $11.6 million, and have decreased by $1.2 million within 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 (pharmacovigilance) of
the Company. Research and development costs for the year ended
December 31, 2017 decreased by $9.2
million or 23 per cent compared to 2016. This decrease is
due to fewer ongoing clinical programs in 2017 compared with 2016,
including the cancellation of the Company's cholangiocarcinoma
trial in December 2016, and the
Company moving certain external service provider activities
previously incurred by the Concordia North America segment to the
Company's integrated operations in Mumbai, India.
The current income tax expense recorded for the year ended
December 31, 2017 decreased by $18.4
million compared to 2016. Income taxes were lower primarily
due to the impact of lower foreign exchange translation of the
income tax expense from the Concordia International segment as well
as lower taxable income compared to 2016.
The net loss from continuing operations for the year ended
December 31, 2017 was $1,590.7
million. Significant components comprising the net loss in
2017 are impairment charges of $1,194.8
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 EBITDA for the year ended December 31, 2017
decreased by $152.7 million or 33 per
cent compared to 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 unfavourable foreign
exchange rate movements impacting translated results during 2017.
Adjusted EBITDA by segment for the 12-month period ended
December 31, 2017 was $99.3
million from Concordia North America and $236.7 million from Concordia International. In
addition, during the 12-month period ended December 31, 2017
the Company incurred $20.7 million of
Corporate costs related to the Corporate Head Office.
As of December 31, 2017, the
Company had cash and cash equivalents of $327 million and 51,282,901 common shares issued
and outstanding.
Conference Call Notification
The Company will hold a conference call on Thursday, March 8, 2018, at 8:30 a.m. ET, hosted by senior management.
CONFERENCE CALL
DETAILS
|
DATE:
|
Thursday, March 8,
2018
|
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:
|
9289998
|
This call is being webcast and can be accessed by going to:
http://event.on24.com/r.htm?e=1602683&s=1&k=4B1F2F5D6D72A7BEA92E8C9BB0354437
An archived replay of the webcast will be available by clicking
the link above.
About Concordia
Concordia is an international specialty pharmaceutical company
with a diversified portfolio of more than 200 patented and
off-patent products, and sales in more than 90 countries. Going
forward, the Company is focused on becoming a leader in European
specialty, off-patent medicines.
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, and adjusted gross profit 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 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.
During the third quarter of 2017, the Company amended its
definition of Adjusted EBITDA and Adjusted Net Income to adjust for
costs associated with management retention costs, included within
acquisition, restructuring and other 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 material impact on previously
issued Non-IFRS measures.
Adjusted Gross Profit
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.
|
|
|
|
Quarter
ended
|
Year
ended
|
For the periods
ended (in $000's)
|
Dec 31,
2017
|
Dec 31,
2016
|
Dec 31,
2017
|
Dec 31,
2016
|
Gross profit per
financial statements
|
100,200
|
120,464
|
435,537
|
594,957
|
Add back: Fair
value adjustment to acquired inventory
|
—
|
394
|
311
|
21,412
|
Adjusted Gross
profit
|
100,200
|
120,858
|
435,848
|
616,369
|
EBITDA
EBITDA is defined as net loss from continuing operations
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
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),
management retention costs, 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 12-month periods ended December
31, 2017 and December 31,
2016.
|
|
|
|
Quarter
ended
|
Year
ended
|
For periods
ended
|
Dec 31,
2017
|
Dec 31,
2016
|
Dec 31,
2017
|
Dec 31,
2016
|
Net loss from
continuing operations
|
(431,773)
|
(663,761)
|
(1,590,735)
|
(1,314,093)
|
|
|
|
|
|
Interest and
accretion
|
224,091
|
91,742
|
506,794
|
300,690
|
Interest
income
|
(5,127)
|
(16,628)
|
(61,302)
|
(21,671)
|
Income
taxes
|
(8,954)
|
(23,010)
|
(36,757)
|
(34,801)
|
Depreciation
|
475
|
512
|
1,962
|
1,939
|
Amortization of
intangible assets
|
51,162
|
41,148
|
226,425
|
182,819
|
EBITDA
|
(170,126)
|
(569,997)
|
(953,613)
|
(885,117)
|
Impairments
|
207,662
|
562,105
|
1,194,765
|
1,132,243
|
Fair value
adjustment to acquired inventory
|
—
|
394
|
311
|
21,412
|
Acquisition
related, restructuring and other
|
21,129
|
20,309
|
46,778
|
35,968
|
Share-based
compensation
|
285
|
3,438
|
8,711
|
30,753
|
Fair value changes
of purchase consideration and derivatives
|
41,983
|
(20,599)
|
110,986
|
(6,309)
|
Foreign exchange
(gain) loss
|
881
|
1,403
|
1,551
|
(3,626)
|
Unrealized foreign
exchange (gain) loss
|
(9,848)
|
82,672
|
(72,891)
|
128,574
|
Legal settlements
and related legal costs
|
—
|
783
|
—
|
14,246
|
Gain on debt
settlement
|
(21,188)
|
—
|
(21,188)
|
—
|
Adjusted
EBITDA
|
70,778
|
80,508
|
315,410
|
468,144
|
Notice Regarding Trademarks
This press release includes trademarks that are protected under
applicable intellectual property laws and are the property of
Concordia or its affiliates or its licensors. Solely for
convenience, the trademarks of Concordia, its affiliates and/or its
licensors referred to in this press release may appear with or
without the ® or TM symbol, but such references or the absence
thereof are not intended to indicate, in any way, that the Company
or its affiliates or licensors will not assert, to the fullest
extent under applicable law, their respective rights to these
trademarks. Any other trademarks used in this press release are the
property of their respective owners.
Notice regarding future-oriented financial
information:
To the extent any forward-looking statements or forward-looking
information in this press release or in statements made during the
earnings conference call constitute future-oriented financial
information or financial outlooks within the meaning of applicable
securities laws, such information is being provided to demonstrate
the potential financial performance of the Company 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
(collectively, "FOFI"), 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", a number of
which are beyond the Company's control. In addition, the following
is summary of the significant assumptions underlying the FOFI
contained in the Company's earnings disclosure:
- prescription trends;
- pricing for the Company's products;
- future market demand trends;
- mix of sales to government and non-government customers;
- gross profits for each product;
- foreign currency rates, including translation between the U.S.
dollar and the pound sterling;
- inventory levels;
- operating cost estimates;
- ability to develop and market future product launches;
- anticipated timing of future product launches;
- cost to develop future products;
- anticipated timing to exit markets;
- operating cost synergies realized; and
- annual cost of current tax by jurisdiction
The FOFI do not purport to present the Company's financial
condition in accordance with IFRS, and there can be no assurance
that the assumptions made in preparing the FOFI will prove
accurate. It is expected that there will be differences between
actual and forecasted results, and the differences may be material,
including due to the occurrence of unforeseen events occurring
subsequent to the preparation of the FOFI. The inclusion of the
FOFI in the earnings disclosure should not be regarded as an
indication that Concordia considers the FOFI to be a reliable
prediction of future events, and the FOFI should not be relied upon
as such.
Risks and other factors related to FOFI include those risks and
other factors referenced in this press release as well as in
Concordia's filings with the Canadian Securities Regulators and the
Securities and Exchange Commission, including (a) the factors
described under the heading "Forward-looking Statements" in
Concordia's Management's Discussion and Analysis dated March 8, 2018 for the period ended December 31, 2017 and (b) the factors described
under the heading "Risk Factors" in Concordia's Annual Report on
Form 20-F dated March 8, 2018, both
of which are available on SEDAR, online at www.sedar.com and on
EDGAR, online at www.sec.gov.
Notice Regarding Forward-Looking Statements:
This press release and statements made during the earnings
conference call may include 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 focus on realigning its
capital structure, changes to Concordia's organizational structure,
Concordia's global teams being focussed on leveraging the Company's
diverse portfolio of medicines, global sales platform, and product
pipeline in order to support the Company's long-term growth, the
Company's ability to operate in the ordinary course, discussions
with Concordia's lenders and their advisors with respect the
proposed recapitalization transaction, a proposed recapitalization
transaction, the completion of a proposed recapitalization
transaction including obtaining any necessary approvals and the
expected timing thereof, reducing the Company's existing debt and
interest expense (including the amounts thereof), positioning the
Company for long-term growth, the Company's available liquidity to
operate its business and meet its financial commitments (including
commitments to employees, customers, suppliers and business
partners), the benefits of the CBCA process, proceedings under the
CBCA including with respect to CBCA proceedings compared to
proceedings under bankruptcy and insolvency statutes, the ability
of the CBCA process to protect the Company's business, preserve
Concordia's cash and/or give Concordia additional time to negotiate
with its lenders, optimism about the ability to reach a consensual
transaction with the Company's lenders that would enable Concordia
to move forward with all of the pillars of the Company's DELIVER
strategy in order to maximize the potential of Concordia,
Concordia's intention to make scheduled interest and amortization
payments, Concordia's management continuing to lead day-to-day
operations, achieving the best possible recapitalization
transaction, reaching a consensual transaction with holders of the
Company's debt, maximizing Concordia's potential, implementing a
Plan of Arrangement, addressing certain payments as part of a
proposed recapitalization transaction, protection for the Company
and its subsidiaries against defaults and any related steps or
actions under CBCA proceedings, the focus on becoming a leader in
European specialty, off-patent medicines, Concordia's objectives
and priorities, the outlook for 2018, the implementation of
Concordia's long term growth strategy (and the timing thereof), the
stabilization of Concordia's business, the execution, timing and
impact of Concordia's business stabilization objectives,
Concordia's liquidity, 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), 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, Concordia's
pipeline of products, Concordia's intention to continue to evaluate
additional opportunities above and beyond its current pipeline to
further increase the Company's pipeline and portfolio. the
intention to launch products, the number of potential product
launches, the development and/or approval 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, potential product launches including first-to-market or
early-to-market opportunities for difficult-to-make products,
Concordia's network of partners, Concordia's revenue by geography,
expected debt levels and leverage, free cash flows, Concordia's
debt structure, expected sources of funds (including expected
levels of cash on hand), future growth of the Company (including,
without limitation, the Company's expansion globally), the ability
to pay certain obligations of Concordia, the ability to use the
Company's expected cash flow and cash on hand to pay certain future
obligations, the Company's cash on hand and cash flows being
sufficient to meet the Company's liquidity needs, concentration of
Concordia's business, cash on hand after satisfying obligations
during 2018, 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 (including to fund future
acquisitions and the launch of pipeline products, and settle 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, Concordia's intention
to reduce operating costs across the business 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 associated with a proposed
recapitalization transaction including the inability to complete a
proposed recapitalization transaction or complete a proposed
recapitalization transaction in a timely or efficient manner, the
inability to reduce the Company's debt and/or interest payments,
the inability to position the Company for long-term growth, the
inability to execute the DELIVER strategy, risks associated with
Concordia's organizational structure, including the ability to
retain qualified staff and executives, the inability of Concordia's
current organizational structure to support Concordia's business,
the inability of the Company's global teams to leverage the
Company's diverse portfolio of medicines, global sales platform,
and product pipeline in order to support the Company's long-term
growth, the Company's available liquidity being insufficient to
operate its business and meet its financial commitments (including
commitments to employees, customers, suppliers and business
partners), risks associated with proceedings under the CBCA,
Concordia's management no longer leading day-to-day operations, the
inability to achieve the best possible recapitalization
transaction, the inability to reach a consensual transaction with
holders of the Company's debt, the inability to maximize
Concordia's potential, Concordia's failure to make scheduled
interest and amortization payments (which could result in a loss of
the protections afforded by the CBCA process (including the stay of
proceedings thereunder), the inability to negotiate with
Concordia's lenders, the CBCA process not providing the protection
sought by Concordia, third parties not complying with the CBCA
order and taking steps against Concordia and its subsidiaries, the
inability of the CBCA process to preserve Concordia's cash, the
inability to implement a Plan of Arrangement, the risks associated
with issuing and allocating new equity including the possible
dilution of the Company's outstanding common shares, the value of
existing equity following the completion of a recapitalization
being limited or having no value, the inability to address certain
payments as part of a proposed recapitalization, the inability of
CBCA proceedings to protect the Company and its subsidiaries
against defaults and any related steps or actions, Concordia
defaulting on its obligations (including under its debt agreements)
which could result in Concordia having to file for bankruptcy or
insolvency, Concordia being put into an insolvency or bankruptcy
proceeding as a result of not making in connection with the
commencement of the CBCA proceedings, the Company's inability to
become a leader in European specialty, off-patent medicines,
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 add
additional products to its pipeline of products, 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, cash on hand and cash flows
from operations being insufficient to meet Concordia's liquidity
needs, the inability to implement Concordia's objectives and
priorities, 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, 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 and/or obtain approvals for 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 (including,
without limitation, the U.K. Health Service Medical Supplies
(Costs) Act), 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, Concordia's inability
to reduce operating costs across the business and 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, 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.