OAKVILLE, ON, Nov. 7, 2016 /CNW/ - Concordia International
Corp. ("Concordia" or the "Company") (NASDAQ: CXRX) (TSX: CXR), an
international specialty pharmaceutical company focused on generic
and legacy pharmaceutical products and orphan drugs, today
announced its financial and operational results for the three and
nine months ended September 30, 2016. All financial references
are in U.S. dollars unless otherwise noted.
Financial Results for the Third Quarter 2016
- Revenue of $185.5 million, a
decrease of 19.9% compared with the second quarter of 2016 or a
14.4% decrease on a constant currency basis2. Revenue
for the quarter represented an increase of 99.5% over the third
quarter of 2015
- GAAP net loss from continuing operations of $75.1 million and GAAP loss per share of
$1.47
- Net operating cash flows from continuing operations of
$309.8 million for the nine month
period, compared to $67.9 million in
the comparative period in 2015
- Adjusted EBITDA1 of $104.4
million and adjusted earnings per share1 of
$0.69
- Concordia's International segment launched 24 new products
since October 21, 2015; the Company
remains on track to meet or exceed its target of 60 launches by the
end of 2018
- Concordia is suspending guidance as the Company assesses the
business under new leadership
The Company commented, "Concordia's International segment, on a
constant currency basis2, delivered consistent results
in the third quarter compared to the second quarter of 2016. In
addition, the International segment remains on track to meet or
exceed our target of 60 new product launches by the fourth quarter
of 2018. The Company continues to assess the competitive
environment affecting the North
America and International segments, and is implementing
actions to manage these challenges. Due to recent pressures from
generic competition on Plaquenil® and Nilandron®, as well as
increased pressure on Donnatal® from competition in the category
and what we consider to be an illegal commercial product, we have
experienced variability in forecasting the North American business.
Additionally, with the recent leadership changes, the Company has
determined it will suspend its financial guidance. Concordia's
management team is committed to expeditiously evaluating all
aspects of its business to ensure appropriate actions are taken to
rebuild value for all stakeholders."
Third Quarter 2016 Segmental Results
- On a constant currency basis2 the Concordia
International segment delivered results in the third quarter
consistent with the second quarter of 2016. Concordia International
segment revenue for the third quarter was $137.4 million, compared with $151.5 million in the second quarter of 2016,
representing a $14.1 million or 9.3%
decrease. This represented a 0.2% decrease on a constant currency
basis2.
- Since October 21, 2015, the
Company's International segment has launched 24 products. These
products include branded and generic therapies for the treatment of
prostate cancer, pain, depression, and obesity.
- Concordia North America segment revenue of $45.5 million compared to $90.6 million in the third quarter of 2015. The
decrease was due to competitive market pressures as further
described below.
- Orphan Drug segment revenue of $2.6
million, compared with $2.4
million in the third quarter of 2015.
Management and Board of Directors Changes
On November 2, 2016 the Company
announced that its Board of Directors appointed Allan Oberman as the Company's new Chief
Executive Officer and Jordan
Kupinsky as Chairman of the Board of Directors. The new
appointments will now be effective November
8, 2016 as Mr. Thompson's
departure will be effective on November 8,
2016.
Financial Results
(in $000s,
from continuing
operations)
|
Three Months
Ended
September 30,
2016
|
Three Months
Ended
September 30,
2015
|
Nine Months
Ended
September 30,
2016
|
Nine Months
Ended
September 30,
2015
|
Revenue
|
$185,504
|
$93,005
|
$645,751
|
$202,316
|
Gross
profit
|
$137,034
|
$84,953
|
$474,493
|
$184,203
|
Adjusted gross
profit1
|
$138,540
|
$84,953
|
$495,511
|
$184,203
|
Operating income
(loss)
|
$42,636
|
$44,559
|
($403,882)
|
$78,638
|
Net income (loss),
continuing operations
|
($75,147)
|
$1,535
|
($650,332)
|
$2,069
|
Earnings (loss) per
share, continuing operations – basic
|
($1.47)
|
$0.04
|
($12.75)
|
$0.06
|
Earnings (loss) per
share, continuing operations – diluted
|
($1.47)
|
$0.04
|
($12.75)
|
$0.06
|
Adjusted earnings per
share1, continuing operations – diluted
|
$0.69
|
$1.37
|
$3.42
|
$3.12
|
Adjusted
EBITDA1
|
$104,444
|
$71,376
|
$387,636
|
$145,566
|
Cash and cash
equivalents
|
$162,616
|
$670,548
|
$162,616
|
$670,548
|
Cash and cash
equivalents(including October 2016 senior secured note
offering)
|
$492,616
|
$670,548
|
$492,616
|
$670,548
|
Consolidated Operating Results
The Company's consolidated operating results are generated by
three operating segments: Concordia's North America segment, International segment
and Orphan Drugs segment and a Corporate cost centre.
Revenue for the three and nine months ended September 30,
2016 increased by $92.5 million, or
99%, and increased by $443.4 million,
or 219%, respectively, compared with the corresponding periods in
2015. The increases were primarily due to $137.4 million and $428.8
million of revenue for the three and nine month periods,
respectively, from the Concordia International segment acquired on
October 21, 2015 which was not
included in the comparative period. This revenue increase
attributable to the Concordia International segment was partially
offset in the three month period ended September 30, 2016 by decreased revenue of
$45.2 million from the Concordia
North America segment. The decrease in the Concordia North America
segment revenue was primarily due to lower revenue from Donnatal®
of $11.3 million, which was driven by
lower product demand as a result of competitive pressures, as well
as decreased revenue from Dibenzyline® of $9.2 million, Nilandron® of $5.5 million and Plaquenil® authorized generic of
$13.3 million. Revenue from these
three products, compared with the corresponding period in 2015, was
significantly lower due to the impact of new generic products
entering the market since September 30,
2015.
Gross profit for the three and nine months ended
September 30, 2016 increased by $52.1
million, or 61%, and $290.3
million or 158%, respectively, compared with the
corresponding periods in 2015. The increase for the three months
ended September 30, 2016 was primarily as a result of
increased gross profit of $96.3 from
the Concordia International segment, which was acquired during the
fourth quarter of 2015 and therefore not included in the
comparative period in 2015. This gross profit increase from the
Concordia International segment was offset by a $44.1 million decrease in the gross profit from
the Concordia North America segment primarily due to the business
impacts described above. The increase for the nine months ended
September 30, 2016 was primarily due to the timing of the
Concordia International segment acquisition described above and the
acquisition of the portfolio of products (the "Covis Portfolio")
acquired from Covis Pharma, S.a.r.l. and Covis Injectables,
S.a.r.l. on April 21, 2015 as
described above, and is therefore not representative in the
comparative 2015 period. Gross profit in 2016 was also impacted by
non-cash inventory fair value adjustments of $1.5 million and $21.0
million for the three and nine month periods, respectively.
This results in an increase to cost of sales due to the fair value
adjustment to inventory which were associated with the acquisition
of certain products on June 1, 2016
and the Concordia International segment acquisition.
Adjusted gross profit for the three and nine months ended
September 30, 2016, which represents gross profit removing the
impact of the non-cash fair value adjustments described above,
increased by $53.6 million, or 63%,
and $311.3 million, or 169%,
respectively, compared with the corresponding periods in 2015. The
change in gross profit and adjusted gross profit as a percentage of
revenue in the current quarter and year to date compared with the
corresponding periods in 2015 reflects the impact of lower margins
related to the Concordia International business segment, offset in
part by higher margins associated with certain products included in
the Concordia North America business segment.
Operating expenses for the three and nine months ended
September 30, 2016 increased by $54.0
million, or 134%, and $772.8
million, or 732%, respectively, compared with the
corresponding periods in 2015. Operating expenses were higher in
both periods due to the increased size and scale of the Company's
business after the completion of the acquisition of the Covis
Portfolio and the acquisition of the Concordia International
segment. Operating expenses were significantly higher in the nine
months ended September 30, 2016 due to the impairment recorded
during the second quarter of 2016 of $567.1
million.
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 and nine months ended September 30, 2016
increased by $8.7 million, or 154%,
and $24.9 million, or 138%,
respectively, compared with the corresponding periods in 2015. The
increases are reflective of the increased size and scale of the
Company's business. General and administrative expenses for the
quarter and year to date as a percentage of revenue were 8% and 7%,
respectively, compared with 6% and 9% in the corresponding periods
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 Concordia North America,
Concordia International and Orphan Drugs segments. Selling and
marketing costs for the three and nine months ended
September 30, 2016 increased by $5.5
million, or 98%, and $25.4
million, or 203%, respectively, compared with the
corresponding periods in 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 over 200 products and the related
selling and marketing efforts mainly in the Concordia North America
and Concordia International segments.
Research and development expenses reflect non-capitalized 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 nine months ended September 30, 2016
increased by $6.3 million, or 271%,
and $19.0 million, or 233%,
respectively, compared with the corresponding periods in 2015. This
is due to costs incurred in the Concordia International segment for
product expansion efforts and the costs associated with the
Concordia North America segment.
Operating income (loss) from continuing operations for the three
months ended September 30, 2016 reflects the increase in gross
profit from the Concordia International segment, partially offset
by the decrease in gross profit from the Concordia North America
segment and an increase in operating expenses compared with 2015 as
a result of the increased size and scale of the Company's
business.
Operating income (loss) from continuing operations for the nine
months ended September 30, 2016 reflects the increase in
operating expenses compared with 2015 as a result of the impairment
charge recorded during the second quarter of 2016 and costs
associated with the increased size and scale of the Company's
business, partially offset by the increased gross profit from the
Concordia International segment and the Covis Portfolio.
The net loss from continuing operations for the three and nine
months ended September 30, 2016 was $75.1 million and $650.3
million, respectively and earnings per share loss was
$1.47 per share and $12.75 per share for the three and nine months
ended September 30, 2016. Significant drivers of the net loss
are total foreign exchange losses of $55.7
million, an impairment charge of $567.1 million recorded during the second quarter
of 2016 and result after deducting certain other significant cash
and non-cash expenses which include, but are not limited to,
amortization expense, interest expense and deferred financing
accretion expense.
Adjusted EBITDA for the three and nine months ended
September 30, 2016 increased by $33.1
million or 46% and $242.1
million or 166%, respectively, compared with the
corresponding periods in 2015. The increase is due to results from
the Concordia International segment which were not included in the
comparative period and the Covis Portfolio included in the
comparative period since April 21,
2015.
As of September 30, 2016 the Company had cash of
$162.6 million and had up to
$200 million available from a secured
revolving credit facility, which available amount is subject to
compliance with certain incurrence covenants under the Company's
debt agreements. The Company has not drawn upon the $200 million revolving credit facility, and it is
currently not subject to any financial maintenance covenants which
apply only when the aggregate principal amount of certain
outstanding loans under the Company's credit agreement are greater
than 30% of the aggregate amount of the available revolving
facility.
The Company has an improved liquidity position after the end of
the third quarter with cash and cash equivalents of $492.6 million, which includes approximately
$330 million of net cash
received3 on October 13,
2016 in connection with the closing of the senior secured
note offering.
Cash flows from continuing operations for the nine months ended
September 30, 2016 were $309.8
million. The Company's business continues to generate
sustained cash flows from operating activities. The Company intends
to use cash on hand and cash flows generated from operating
activities to settle debt and other obligations as they become due,
to fund future acquisitions and continue to fund the launch of
pipeline products.
As at September 30, 2016 and
November 7, 2016, the Company had
51,017,004 common shares issued and outstanding.
Conference Call Notification
The Company will hold a conference call on Monday November 7, 2016, at 8:30 a.m. ET, hosted by senior management. A
question-and-answer session will follow the corporate update.
CONFERENCE CALL
DETAILS
|
DATE:
|
Monday, November 7,
2016
|
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:
|
4801308
|
This call is being webcast and can be accessed by going to:
http://event.on24.com/r.htm?e=1294639&s=1&k=395B0457ED01AA9F6D4C2668EA9D31B9
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 and
orphan drugs. Concordia has an international footprint with sales
in more than 100 countries, and has a diversified portfolio of more
than 200 established, off-patent molecules that make up more than
1,300 SKUs. Concordia also markets orphan drugs through its Orphan
Drugs segment, consisting of Photofrin® for the treatment of
certain rare forms of cancer, which is undergoing testing for
potential new indications.
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
earnings per share 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 earnings per share 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, and other related
costs, initial exchange listing expenses on the NASDAQ,
non-operating gains/losses, integration costs, non-cash items such
as unrealized gains / losses on derivative instruments, share based
compensation, change in fair value of purchase consideration,
impairment loss, fair value increases to inventory arising from
purchased inventory from a business combination, gains / losses
from the sale of assets, unrealized gains / losses related to
foreign exchange, non-cash 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, and other related costs, initial exchange listing
expenses on the NASDAQ, non-operating gains/losses, integration
costs, legal settlements (net of insurance recoveries, where
applicable) and related legal costs, non-cash items such as
unrealized gains / losses on derivative instruments, share based
compensation, change in fair value of purchase consideration,
impairment loss, 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 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 income
(loss) to EBITDA and to adjusted EBITDA for the quarters and nine
months ended September 30, 2016 and 2015:
For the periods
ended ($000's)
|
Three months
ended
September 30,
2016
|
Three months
ended
September 30,
2015
|
Nine months
ended
September 30,
2016
|
Nine months
ended
September 30,
2015
|
Net income (loss)
from continuing operations
|
($75,147)
|
$1,535
|
($650,332)
|
$2,069
|
Interest and
accretion
|
$72,352
|
$36,507
|
$208,948
|
$63,847
|
Interest
income
|
($5,043)
|
—
|
($5,043)
|
—
|
Income tax (recovery)
expense
|
($5,192)
|
$1,072
|
($11,791)
|
$2,433
|
Depreciation
|
$528
|
$33
|
$1,427
|
$105
|
Amortization of
intangible assets
|
$42,715
|
$14,260
|
$141,671
|
$34,180
|
EBITDA from
continuing operations
|
$30,213
|
$53,407
|
($315,120)
|
$102,634
|
Fair value adjustment
to acquired inventory
|
$1,506
|
—
|
$21,018
|
—
|
Acquisition related,
restructuring and other
|
$4,251
|
$6,652
|
$15,659
|
$19,608
|
Share-based
compensation
|
$10,069
|
$5,259
|
$27,315
|
$10,231
|
Exchange listing
expenses
|
—
|
$326
|
—
|
$900
|
Change in fair value
of purchase consideration
|
($323)
|
$287
|
$14,290
|
$1,904
|
Impairment
|
$3,062
|
—
|
$570,138
|
—
|
Foreign exchange
gain
|
($3,489)
|
($42)
|
($5,029)
|
($324)
|
Unrealized foreign
exchange loss (gain)
|
$59,155
|
—
|
$45,902
|
—
|
Realized loss on
foreign exchange forward contract
|
—
|
—
|
—
|
$5,126
|
Unrealized loss on
foreign exchange forward contract
|
—
|
$5,487
|
—
|
$5,487
|
Legal settlements and
related legal costs
|
—
|
—
|
$13,463
|
—
|
Adjusted EBITDA
from continuing operations
|
$104,444
|
$71,376
|
$387,636
|
$145,566
|
The table below sets forth the reconciliation of net income
(loss) to adjusted net income and adjusted earnings per share for
the quarters ended September 30, 2016 and September 30,
2015:
For the quarters
ended
($000s, except for
share and per share amounts)
|
September 30,
2016
|
September 30,
2015
|
Weighted average
number of fully diluted shares
|
51,862,590
|
35,248,353
|
Net income (loss)
from continuing operations
|
($75,147)
|
$1,535
|
Adjustments:
|
|
|
Fair value adjustment
to acquired inventory
|
$1,506
|
—
|
Share-based
compensation
|
$10,069
|
$5,259
|
Exchange listing
costs
|
—
|
$326
|
Acquisition related,
restructuring and other
|
$4,251
|
$6,652
|
Depreciation
|
$528
|
$33
|
Amortization of
intangible assets
|
$42,715
|
$14,260
|
Change in fair value
of purchase consideration
|
($323)
|
$287
|
Impairment
|
$3,062
|
—
|
Foreign exchange
losses (gain)
|
$55,666
|
($42)
|
Unrealized loss on
foreign exchange forward contract
|
—
|
$5,487
|
Interest
accretion
|
$7,348
|
$16,251
|
Legal settlement and
related legal cost
|
—
|
—
|
Tax
adjustments4
|
($14,047)
|
($1,885)
|
Adjusted net
income, continuing operations
|
$35,628
|
$48,163
|
Adjusted earnings
per share, continuing operations
|
$0.69
|
$1.37
|
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 financial performance (including the
performance of its International segment), the ability of Concordia
to execute and deliver on business plans, 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 earn-out obligations in 2016 and
beyond, optimism about Concordia's future, the growth of Concordia
and the rate of revenue growth, the sources of revenue growth,
organic growth and the sources thereof, rate of organic 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 number of product launches over the next
three years, 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 earn-out obligations of
Concordia, the ability to use the Company's expected cash flow to
pay certain future obligations (including, without limitation,
earn-out and debt obligations), success of product launches,
concentration of Concordia's business, including, without
limitation, revenue from U.S. government reimbursement, cash on
hand after satisfying obligations during 2016, the performance of
Concordia's products and segments, the revenue-generating
capabilities and/or potential of Concordia's assets, Concordia's
financial strength, the ability of Concordia's products and/or
business divisions to generate a stable revenue stream for the
development of products and/or acquisition opportunities, 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 long-term 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 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,
regulatory investigations, 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 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 earnings per share 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 third
quarter of 2016.
3 Net cash proceeds from senior secured note offering
of $350 million less estimated
expenses of approximately $20
million.
4 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.
SOURCE Concordia International Corp.