- Reported third quarter revenue of $154.6
million
- Reported third quarter adjusted EBITDA1 of
$78.6 million
- Generated cash flow from operations of $227.4 million in the first nine months of
2017
- Concluded the third quarter with a cash balance of $341.3 million
OAKVILLE, ON, Nov. 14, 2017 /PRNewswire/ - 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 nine months ended September 30, 2017. All financial references are
in U.S. dollars (USD) unless otherwise noted.
"During the quarter, we launched our long-term growth strategy,
DELIVER, and we generated financial results that were in line with
our forecasts," said Allan Oberman,
Chief Executive Officer of Concordia. "Both represent important
progress for Concordia as we continue to focus on the realignment
of our capital structure."
Consolidated Third Quarter 2017 Financial and
Operational Results and Recent Events
- Reported revenue of $154.6
million, compared to $185.5
million for the same period in 2016 and $160.8 million for the second quarter of
2017.
- Reported third quarter adjusted EBITDA1 of
$78.6 million, compared to
$104.4 million for the same period in
2016, and $81.8 million in the second
quarter of 2017.
- Generated cash flows from operating activities of $227.4 million in the first nine months of 2017,
compared to $313.1 million for the
same period in 2016.
- As of September 30, 2017, the
Company's liquidity consisted of $341.3
million of cash and cash equivalents.
- Subsequent to quarter end, 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.
- The commencement of the CBCA proceedings resulted in an event
of default under the Company's credit agreement dated October 21, 2015, the indenture governing the
Company's 9.00% senior secured notes, and the Company's currency
swaps, which defaults are subject to the stay of proceedings issued
by the Ontario Superior Court of Justice.
- As contemplated by the CBCA order, the following payments owed
to unsecured lenders were not paid as scheduled, and are instead
expected to be addressed (or have been settled) as part of the
proposed recapitalization transaction under the CBCA proceeding:
approximately $26 million of interest
due on October 16, 2017 under
Concordia's 7.00% unsecured senior notes; approximately
$2.5 million of interest under
Concordia's unsecured, extended bridge facility due on October 23, 2017; and approximately $34 million of principal and accrued interest due
on October 20, 2017 under the
Company's unsecured, two-year equity bridge facility. Subsequent to
quarter end, the Company agreed to settle the principal amount and
accrued interest due on the two-year equity bridge at a significant
discount to par.
- On October 20, 2017, the
counterparty to the Company's currency swaps, which Concordia
entered into in August and November of 2016, notified the Company
that it would be terminating the currency swaps effective
October 23, 2017 due to the
commencement of the CBCA proceedings. In addition, as part of the
CBCA process, the Company agreed to terminate the revolving
commitments under its credit agreement.
Third Quarter 2017 Segment Results
North America segment revenue
of $36.9 million for three months
ended September 30, 2017 decreased by
$11.1 million or 23%, compared to the
corresponding period in 2016. The decrease was primarily due to a
$6.3 million decrease from Lanoxin®
authorized generic, a $1.5 million
decrease from Nilandron®, and a $3.0
million decrease from Donnatal®, as a result of additional
competitive pressures that have resulted in a loss of market
share.
In the third quarter of 2017, Donnatal® continued to face
pressure from a non-FDA approved product being distributed by a
competitor, and an additional competitive product that was launched
in the second quarter of 2017. These decreases were partially
offset by a $7.3 million increase in
revenue from Plaquenil® authorized generic when compared to the
comparative period in 2016, which lower revenue in the comparative
period of 2016 was due to the launch of an additional generic
competitor late in the second quarter of 2016.
Third quarter 2017 revenue for the North America segment was 19% lower than
second quarter 2017 revenue of $45.5
million, due to declines in revenue from branded and
authorized generic products.
International segment revenue of $117.7
million for the three months ended September 30, 2017, decreased by $19.8 million or 14 per cent, compared to the
corresponding period in 2016. The primary drivers of the decrease
were a $5.9 million decrease from
Fusidic Acid; a $4.5 million decrease
from Liothyronine Sodium; a $3.6
million decrease from Prednisolone; and a $3.3 million decrease from Levothyroxine
Sodium.
These lower product revenues are primarily due to ongoing
competitive market pressures, and were partially offset by a
$3.5 million increase from
Nitrofurantoin, and a $2.9 million
increase from Acetylsalicylic Acid.
Third quarter 2017 revenue for the Concordia International
segment increased by $2.4 million
compared to second quarter 2017 revenue of $115.3 million primarily due to the impact of
$2.3 million higher revenue from
Nitrofurantoin and $1.9 million
higher revenue from Flurbiprofen, partially offset by $2.2 million lower revenue from Fusidic Acid as a
result of competitive market pressures.
Pipeline Update
During the third quarter of 2017, the Company launched two new
products into markets that have a current IMS-estimated value of
$21 million.
Concordia also has 13 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 $94 million.
In addition, the Company currently has 27 products (compared to
26 products in the second quarter of 20l7) 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 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
$600 million.
In total, Concordia's pipeline is comprised of more than 50
products that, if launched, could compete in markets that have a
current IMS-estimated value in excess of $2
billion.
Financial Results
|
|
|
|
Three months
ended
|
Nine months
ended
|
(in $000's, except
per share data)
|
Sep 30,
2017
|
Sep 30,
2016
|
Sep 30,
2017
|
Sep 30,
2016
|
Revenue
|
154,622
|
185,504
|
475,964
|
645,751
|
Gross
profit
|
108,610
|
137,034
|
335,337
|
474,493
|
Gross profit
%
|
70%
|
74%
|
70%
|
73%
|
Adjusted gross
profit (1)
|
108,610
|
138,540
|
335,648
|
495,511
|
Operating income
(loss) from continuing operations
|
9,589
|
42,636
|
(953,300)
|
(417,345)
|
Net loss from
continuing operations
|
(69,485)
|
(75,147)
|
(1,158,962)
|
(650,332)
|
Loss per share,
from continuing operations
|
|
|
|
|
Basic
|
(1.36)
|
(1.47)
|
(22.67)
|
(12.75)
|
Diluted
|
(1.36)
|
(1.47)
|
(22.67)
|
(12.75)
|
EBITDA
(1)
|
63,144
|
30,213
|
(783,487)
|
(315,120)
|
Adjusted EBITDA
(1)
|
78,582
|
104,444
|
244,632
|
387,636
|
Consolidated Results of Operations
Consolidated revenue for the three and nine month periods ended
September 30, 2017 decreased by
$30.9 million or 17%, and
$169.8 million, or 26%, 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 revenues for the first half of 2017
compared to the corresponding period in 2016.
Revenues were lower primarily due to lower volumes, primarily a
result of new market entrants on a number of the Company's
products. The Concordia North America segment revenue for the three
months ended September 30, 2017
decreased by 23% when compared to the corresponding period in 2016,
mainly due to lower volumes on key products, including Lanoxin®
authorized generic, Nilandron®, and Donnatal®. The Concordia
International segment revenue for the three months ended
September 30, 2017 decreased by 14%
primarily due to volume and price declines on key products,
including Fusidic Acid, Levothyroxine Sodium, and Prednisolone.
Gross profit for the three and nine month periods ended
September 30, 2017 decreased by
$28.4 million, or 21%, and
$139.2 million, or 29%, respectively,
compared to the corresponding periods in 2016 primarily due to the
revenue decreases described above. The decrease in gross profit
percentage of 4% for the three month period ended September 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 3% for the nine months ended September 30, 2017 is lower than the 4% for the
three month period ended September 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 nine month periods ended
September 30, 2017 increased by
$4.6 million or 5%, and $396.8 million, or 44%, respectively, compared to
the corresponding periods in 2016. Operating expenses were higher
during the three months ended September 30,
2017 primarily due to $10.0
million higher acquisition related, restructuring and other
costs and $8.4 million higher
amortization charges on intangible assets, partially offset by
$7.1 million lower share based
compensation expense.
Operating expenses on a year-to-date basis were $396.8 million higher primarily due to a
$417.0 million higher impairment
charge. Excluding impairments, operating expenses for the nine
months ended September 30, 2017
decreased by $20.2 million, or 6%
compared to the corresponding period in 2016. This decrease was
primarily due to a combination of the following: $18.9 million lower share-based compensation
expense; $14.6 million lower expense
for fair value of purchase consideration and $13.5 million lower litigation settlement
expenses, partially offset by $33.6
million higher amortization of intangible assets and
$10.0 million higher acquisition
related, restructuring and other 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 three and nine month periods ended September 30, 2017 decreased by 18% and 9%,
respectively, compared to the corresponding periods in 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 three and nine month periods ended
September 30, 2017 decreased by
$0.8 million, or 7%, and $9.1 million, or 24%, 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. The lower costs
during the three month period ended September 30, 2017 as a result of the termination
of the Donnatal® contract sales force within the Concordia North
America segment was partially offset by $2.0
million higher marketing spend 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 (Pharmacovigilence) of
the Company. Research and development costs for the three and nine
month periods ended September 30,
2017 decreased by $0.7
million, or 8%, and $4.0
million, or 15%, 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 internal operations in Mumbai, India.
The current income tax expense recorded for the three and nine
month periods ended September 30,
2017 decreased by $5.0 million
and $17.2 million, respectively,
compared to the corresponding periods in 2016. Income taxes were
lower primarily due to the impact of foreign exchange translation
of the income tax expense from the Concordia International segment
as well as lower taxable income compared to corresponding periods
in 2016.
The net loss from continuing operations for the three and nine
month periods ended September 30,
2017 was $69.5 million and
$1.2 billion, respectively, and
earnings per share loss was $1.36 and
$22.67, respectively, per share.
Significant components comprising the net loss for the nine month
period ended September 30, 2017 are
an impairment charge of $987.1
million recorded during the second quarter of 2017, fair
value losses on derivative contracts of $69.3 million, interest and accretion expense of
$282.7 million and amortization of
$175.3 million offset by gross profit
of $335.3 million.
Adjusted EBITDA for the three and nine month periods ended
September 30, 2017 decreased by
$25.9 million, or 25%, and
$143.0 million or 37%, 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
during the first half of 2016.
Adjusted EBITDA by segment for the three and nine month periods
ended September 30, 2017 was
$23.9 million and $79.5 million, respectively, from Concordia North
America, and $59.3 million and
$180.6 million, respectively, from
Concordia International. In addition, during the three and nine
month periods ended September 30,
2017 the Company incurred $4.6
million and $15.4 million,
respectively, of Corporate costs related to the Corporate Head
Office.
As of September 30, 2017, the
Company had cash of $341.3 million,
and 51,282,675 common shares issued and outstanding.
Conference Call Notification
The Company will hold a conference call on Tuesday, November 14, 2017, at 8:30 a.m. ET, hosted by senior management.
CONFERENCE CALL
DETAILS
|
DATE:
|
Tuesday, November 14,
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:
|
9879679
|
This call is being webcast and can be accessed by going to:
http://event.on24.com/r.htm?e=1535629&s=1&k=B3BF1AD3DED96CAD83E708FE2BE9CADC
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, 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.
During the third quarter of 2017, the Company amended its
definition of Adjusted EBITDA and Adjusted Net Income to adjust for
costs associated with retention bonuses, 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.
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
|
Nine months
ended
|
(in
$000's)
|
Sep 30,
2017
|
Sep 30,
2016
|
Sep 30,
2017
|
Sep 30,
2016
|
Gross profit per
financial statements
|
108,610
|
137,034
|
335,337
|
474,493
|
Add back: Fair
value adjustment to acquired inventory
|
—
|
1,506
|
311
|
21,018
|
Adjusted Gross
profit
|
108,610
|
138,540
|
335,648
|
495,511
|
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),
retention bonuses, 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 nine month periods ended September
30, 2017 and September 30,
2016.
|
|
|
|
Three months
ended
|
Nine months
ended
|
(in
$000's)
|
Sep 30,
2017
|
Sep 30,
2016
|
Sep 30,
2017
|
Sep 30,
2016
|
Net loss from
continuing operations
|
(69,485)
|
(75,147)
|
(1,158,962)
|
(650,332)
|
|
|
|
|
|
Interest and
accretion expense
|
95,926
|
72,352
|
282,703
|
208,948
|
Interest
income
|
(19,053)
|
(5,043)
|
(56,175)
|
(5,043)
|
Income
taxes
|
4,181
|
(5,192)
|
(27,803)
|
(11,791)
|
Depreciation
|
499
|
528
|
1,487
|
1,427
|
Amortization of
intangible assets
|
51,076
|
42,715
|
175,263
|
141,671
|
EBITDA
|
63,144
|
30,213
|
(783,487)
|
(315,120)
|
Impairment
|
—
|
3,062
|
987,103
|
570,138
|
Fair value
adjustment to acquired inventory
|
—
|
1,506
|
311
|
21,018
|
Acquisition
related, restructuring and other
|
14,266
|
4,251
|
25,649
|
15,659
|
Share-based
compensation
|
2,999
|
10,069
|
8,426
|
27,315
|
Fair value (gain)
loss on purchase consideration and derivatives
|
21,357
|
(323)
|
69,003
|
14,290
|
Foreign exchange
(gain) loss
|
(508)
|
(3,489)
|
670
|
(5,029)
|
Unrealized foreign
exchange (gain) loss
|
(22,676)
|
59,155
|
(63,043)
|
45,902
|
Legal settlements
and related legal costs
|
—
|
—
|
—
|
13,463
|
Adjusted
EBITDA
|
78,582
|
104,444
|
244,632
|
387,636
|
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 made during the earnings
conference call 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, 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, 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 2017
objectives and priorities, 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, 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 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 (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 ability 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, 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), 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 the payments
described herein, 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 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 for 2017, which could result in financial strain on the
Company and continued pressure on the Company's business,
Concordia's securities, risks associated with developing new
product indications, increased indebtedness and leverage, the
inability to generate cash flows, revenues and/or stable margins,
the inability to grow organically, the inability to repay debt
and/or satisfy future obligations, 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, 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.