Biovail Reports Record Fourth Quarter and Full Year 2001 Results.Business Editors TORONTO--(BUSINESS WIRE)--Feb. 21, 2002 Biovail Biovail TSX: BVF NYSE: BVF is Canada's largest pharmaceutical company, operating internationally in all aspects of pharmaceutical products. Its major production facility is located in Steinbach, Manitoba. Corporation (NYSE NYSE See: New York Stock Exchange :BVF BVF Biovail Corporation (stock symbol) BVF Berufsverband der Frauenärzte eV (Muenchen, Germany) BVF Bearing Versus Frequency )(TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :BVF) Product Sales Revenue Increased 80% for the Fourth Quarter and 139% for Full Year 2001 Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $1.35 for 2001 Increased 57%, Excluding Certain Charges Biovail Corporation today reported record financial results in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. General Accepted Accounting Principals (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) for the fourth quarter and year-ending Year-Ending (or "12-months-ending") is a 12 month period used for financial and other seasonal reporting. In the context of finance, "Year-ending" is often provided in monthly financial statements detailing the performance of a business entity. December December: see month. 31, 2001. Total revenues for the fourth quarter of 2001 increased 79% to $178.3 million, compared to $99.8 million reported for the fourth quarter of 2000. Total revenues for the year ended December 31, 2001 were $583.3 million reflecting an increase of $274.1 million or 89% over the year ended December 31, 2000 sales of $309.2 million. These favourable results are primarily driven by sales of the Cardizem Car·di·zem A trademark for the drug diltiazem hydrochloride. diltiazem hydrochloride Adizem (UK), Angitil (UK), Apo-Diltiaz (CA), Apo-Diltiazem (CA), Calcicard (UK), Cardizem, Cardizem CD, Cardizem LA, Cartia XT, (R) brands in the marketplace, sales of the Company's controlled-release generic Generic Describes the characteristics and/or experience of the total universe of a coupon of MBS sector type; that is, in contrast to a specific pool or collateral group, as in a specific CMO issue. product portfolio, sales associated with Biovail Pharmaceuticals USA acquired in the fourth quarter 2000 and product sales revenue in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . Net income increased 67% and was $73.8 million for the fourth quarter 2001 versus fourth quarter 2000 net income of $44.2 million. Net income for 2001 of $202.9 million increased 64% versus $124.0 million for the prior year equivalent period. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased 53% to $0.46 per share for the fourth quarter 2001 versus $0.30 per share for the fourth quarter 2000. For the year 2001, diluted earnings per share increased 57% to $1.35 per share for 2001 versus $0.86 per share for 2000. These results exclude certain charges described below. For the quarter ended December 31, 2001, the charges excluded from the net income and diluted earnings per share calculations above are the $12.2 million premium paid on the conversion of $134.5 million of convertible debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. and the $80.5 million write down of assets as described below. In the fourth quarter 2000, a charge excluded from the net income and diluted earnings per share calculations above was the $66.9 million write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of acquired research and development associated with products under development for Intelligent Polymers Limited. Charges excluded from 2001 net income and diluted earnings per share include a $34.9 million premium paid on the conversion of $300 million of convertible debentures and the $80.5 million write down of assets described below. Charges excluded from the calculation of 2000 net income and diluted earnings per share were the $208.4 million write-off of acquired research and development associated with the products under development for Intelligent Polymers, an extraordinary charge of $20.0 million related to the early retirement of Senior Notes and the $43.5 million adjustment for the cumulative effect of the adoption of SAB SAB Spontaneous abortion. See Abortion. 101. Net loss and diluted earnings per share including charges for the three months ended December 31, 2001 were $18.9 million and $0.13 per share respectively versus $22.7 million and $0.18 per share respectively for the comparable 2000 period. Net income and diluted earnings per share including charges for the twelve months ended December 31, 2001 were $87.4 million and $0.58 per share respectively for the comparable 2000 period. The write down of assets is primarily associated with two product rights, Keftab Noun 1. Keftab - an oral cephalosporin (trade names Keflex and Keflin and Keftab) commonly prescribe for mild to moderately severe infections of the skin or ears or throat or lungs or urinary tract cephalexin, Keflex, Keflin and Duravent, which were acquired as part of the acquisition of DJ Pharma Pharma may be an abbreviation for:
Management utilizes a measure of net income and earnings per share on a basis that excludes certain charges to better assess operating performance. Management has consistently applied this measure when discussing earnings or earnings guidance and will continue to do so going forward. Management believes that most of the Company's shareholders prefer to analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. the Company's results based on this measure, as it is consistent with industry practice. The excluded charges are also disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). to give investors the ability to further analyze the Company's results. Eugene Melnyk Eugene Melnyk (born May 27, 1959 in Toronto, Ontario) is a Canadian businessman of Ukrainian origin who now resides in Barbados. He is the chairman and chief executive officer of Biovail Corporation. , Chairman of the Board and Chief Executive Officer, commented, "The year 2001 was Biovail's most successful year in the Company's history. During 2001, the Company submitted three New Drug Applications to the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. , completed the integration of a U.S sales and marketing organization, completed the acquisition of the Cardizem(R) and Zovirax Zo·vi·rax A trademark for the drug acyclovir. acyclovir sodium Alti-Acyclovir (CA), Avirax (CA), Zovirax Pharmacologic class: Acyclic purine nucleoside analogue Therapeutic class: products at attractive values, recorded growth in year over year product sales in excess of 135% such that over 90% of Biovail's revenue now comes from the manufacture and sale of pharmaceutical products, eliminated approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $700 million of debt and completed a successful equity offering that raised approximately $560 million. Biovail enters 2002 with over 20 products in development, numerous ongoing Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA clinical studies, a very strong balance sheet and clearly visible drivers for 2002 growth." Financial Results Product sales revenue of $162.7 million increased 80% or $72.2 million during the fourth quarter 2001 versus fourth quarter 2000 and increased 139% to $537.1 million for the year 2001 versus 2000. The increase in product sales revenue is primarily due to sales of the Cardizem(R) line in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , strong growth in the sales of generic products, sales of branded products by Biovail Pharmaceuticals USA and sales by Biovail Pharmaceuticals Canada. Excluding product sales revenue associated with the acquisition of the Cardizem(R) brands and Biovail Pharmaceuticals USA (organic) product sales revenue increased over 55% for the year 2001 versus the prior year. Research and development revenues were $4.5 million and $14.6 million for the fourth quarter and year 2001 respectively compared to 2000 levels of $4.1 million and $66.8 million respectively. The reduction in full year research and development revenues is due to the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of Biovail's research and development arrangement with Intelligent Polymers Limited at the end of September September: see month. 2000. Royalty Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced. and licensing revenue of $11.2 million and $31.5 million for the fourth quarter and year 2001 respectively reflects increases in excess of approximately 113% and 82% respectively versus comparable 2000 levels primarily due to royalties Not to be confused with Royal family. Royalties (sometimes, running royalties) are usage-based payments made by one party (the "licensee") to another (the "licensor") for ongoing use of an asset, most typically an intellectual property (IP) right. associated with the sale of a Cardizem(R) product by a third party. Gross margins were approximately 78% for the fourth quarter and 77% for the year 2001 versus approximately 70% for the comparable 2000 periods. The improvement in gross margins is primarily due to sales of higher margin products including the Cardizem(R) brands and favourable sales mix sales mix See product mix. . Sales of branded pharmaceutical products accounted for more than 65% of product sales revenue for both the fourth quarter and year 2001. Research and development expenses were $14.2 million and $51.0 million for the fourth quarter and year 2001. Research and development expenses increased significantly in the fourth quarter 2001 versus fourth quarter 2000 and were in line with total year 2000 spending levels. Selling, general and administrative expenses continue to increase significantly as Biovail executes its U.S. sales force expansion program. For the fourth quarter and year 2001, selling, general and administrative expenses were $32.4 million and $110.1 million reflecting increases in excess of 110% versus 2000 levels primarily due to the selling and marketing expenses associated with Biovail Pharmaceuticals USA acquired in the fourth quarter 2000. Amortization expense was $12.0 million for the fourth quarter and $44.5 million for the year 2001. The increase in amortization expense versus last year's comparable levels of $4.2 million and $7.2 million is primarily due to the amortization expenses associated with the acquisition of Biovail Pharmaceuticals USA and the Cardizem(R) brands. Excluding the charges outlined above, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for fourth quarter 2001 increased to $84.1 million versus $51.1 million earned in the fourth quarter of 2000. On the same basis, operating income was $251.6 million for the year 2001 versus $130.4 million for the year 2000. Net interest expense was $4.8 million for the fourth quarter 2001 and approximately $33.5 million for the year 2001. The increase in net interest expense versus the net interest expense level of $2.3 million for the fourth quarter 2000 and net interest income of $3.0 million for the year 2000 is primarily due to interest paid on the convertible debentures issued in March of 2000, lower cash balances and advances made against the Company's revolving term credit facility established at the end of 2000. In November November: see month. 2001, Biovail completed an equity offering providing the Company with net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of approximately $560.0 million. Biovail has used a portion of these proceeds to eliminate borrowings under its Revolving Term Credit Facility. Additionally, Biovail converted its outstanding convertible debentures for 10.4 million common shares in 2001. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. was $295.5 million for the year 2001 compared to $102.5 million for the year 2000. Although EBITDA is a commonly used measure, it is a non-GAAP earnings measure that does not have a standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning. Therefore, this measure may not be comparable to similar measures presented by other companies. The Company will be hosting a conference call today to review the fourth quarter and year end December 31, 2001 financial results. The conference call will be broadcast live at 8:30 a.m. E.S.T. on the world wide web at www.biovail.com and a replay of the conference call will be available on this website shortly after the call. Biovail Corporation is an international full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. pharmaceutical company, engaged in the formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation , clinical testing, registration, manufacture, sale and promotion of pharmaceutical products utilizing advanced drug delivery technologies. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. To the extent any statements made in this release contain information that is not historical, these statements are essentially forward looking and are subject to risks and uncertainties, including the difficulty of predicting FDA approvals, acceptance and demand for new pharmaceutical products, the impact of competitive products and pricing, new product development and launch, reliance on key strategic alliances, availability of raw materials, the regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. environment, fluctuations in operating results and other risks detailed from time to time in the company's filings with the Securities and Exchange Commission.
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
December 31 December 31
2001 2000
------------------- -----------------
ASSETS
Current
Cash and cash equivalents $ 434,891 $ 125,144
Accounts receivable 96,556 105,850
Inventories 38,506 24,108
Deposits and prepaid expenses 6,643 5,347
------------------- -----------------
576,596 260,449
Long-term investments 2,355 1,561
Property, plant and
equipment, net 85,581 52,541
Goodwill, net 96,477 103,105
Intangible assets, net 556,360 667,431
Other assets, net 14,114 22,180
------------------- -----------------
$ 1,331,483 $1,107,267
=================== =================
LIABILITIES
Current
Accounts payable $ 31,811 $ 34,683
Accrued liabilities 59,989 35,452
Income taxes payable 17,318 6,711
Deferred revenue 27,030 26,334
Current portion of
long-term obligations 12,592 182,564
------------------- -----------------
148,740 285,744
Deferred revenue 23,100 27,900
Long-term obligations 33,569 256,180
Convertible Subordinated
Preferred Equivalent Debentures - 299,985
------------------- -----------------
205,409 869,809
------------------- -----------------
SHAREHOLDERS' EQUITY
Common shares 1,402,586 492,733
Warrants 6,221 7,912
Deficit (280,004) (261,819)
Accumulated other
comprehensive loss (2,729) (1,368)
------------------- -----------------
1,126,074 237,458
------------------- -----------------
$ 1,331,483 $1,107,267
=================== =================
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(All dollar amounts except per share data are expressed
in thousands of U.S. dollars)
(Unaudited)
Three Months Ended Year Ended
December 31 December 31
---------------------- ----------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
REVENUE
Product sales $ 162,666 $ 90,441 $ 537,138 $ 224,996
Research and development 4,479 4,104 14,596 66,834
Royalty and licensing 11,197 5,264 31,529 17,340
---------- ---------- ---------- ----------
178,342 99,809 583,263 309,170
---------- ---------- ---------- ----------
EXPENSES
Cost of goods sold 35,712 26,647 125,995 67,980
Research and development 14,154 4,252 51,017 51,709
Selling, general and
administrative 32,425 13,661 110,100 51,857
Amortization 11,955 4,183 44,513 7,232
Write down of assets 80,482 - 80,482 -
Acquired research and
development - 66,924 - 208,424
---------- ---------- ---------- ----------
174,728 115,667 412,107 387,202
---------- ---------- ---------- ----------
Operating income (loss) 3,614 (15,858) 171,156 (78,032)
Interest income
(expense), net (4,844) (2,264) (33,500) 2,955
Debt conversion premium (12,192) - (34,923) -
---------- ---------- ---------- ----------
Income (loss) before
income taxes (13,422) (18,122) 102,733 (75,077)
Provision for
income taxes 5,500 4,625 15,285 9,360
---------- ---------- ---------- ----------
Income (loss) before
extraordinary item and
cumulative effect of
change in accounting
principle (18,922) (22,747) 87,448 (84,437)
Extraordinary item - - - (20,039)
Cumulative effect of
change in accounting
principle - - - (43,500)
---------- ---------- ---------- ----------
Net income (loss) $ (18,922) $ (22,747) $ 87,448 $(147,976)
========== ========== ========== ==========
Diluted earnings (loss)
per share $ (0.13) $ (0.18) $ 0.58 $ (1.16)
========== ========== ========== ==========
Net income (loss) $ (18,922) $ (22,747) $ 87,448 $(147,976)
Add back
Write down of assets 80,482 - 80,482 -
Acquired research and
development - 66,924 - 208,424
Debt conversion premium 12,192 - 34,923 -
Extraordinary item - - - 20,039
Cumulative effect of
change in accounting
principle - - - 43,500
---------- ---------- ---------- ----------
Net income excluding
certain charges (Note) $ 73,752 $ 44,177 $ 202,853 $ 123,987
========== ========== ========== ==========
Diluted earnings per
share excluding certain
charges (Note) $ 0.46 $ 0.30 $ 1.35 $ 0.86
========== ========== ========== ==========
Weighted average number
of common shares
outstanding (000s)
Basic 146,469 129,980 136,928 128,824
========== ========== ========== ==========
Diluted 159,478 146,477 150,690 143,512
========== ========== ========== ==========
Note: Management utilizes a measure of net income and earnings per share on a basis that excludes certain charges to better assess operating performance. Management has consistently applied this measure when discussing earnings or earnings guidance and will continue to do so going forward. Management believes that most of the Company's shareholders prefer to analyze the Company's results based on this measure, as it is consistent with industry practice. The excluded charges are also disclosed to give investors the ability to further analyze the Company's results.
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
Year Ended
December 31
---------------------------------
2001 2000
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 87,448 $ (147,976)
Depreciation and amortization 56,867 21,526
Amortization of discount on
long-term obligations 10,999 -
Write down of assets 80,482 -
Debt conversion premium 34,923 -
Deferred income taxes 1,450 3,750
Interest paid through the
issuance of common shares 1,250 -
Compensation cost for employee
stock options 737 461
Acquired research and development - 208,424
Extraordinary item - 20,039
Cumulative effect of change in
accounting principle - 43,500
-------------- --------------
274,156 149,724
Change in non-cash operating items 21,314 (47,230)
-------------- --------------
Cash provided by operating
activities 295,470 102,494
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant
and equipment, net (44,436) (15,845)
Additions to intangible assets (27,445) (27,752)
Reduction in intangible assets 15,000 -
Acquisition of long-term
investments (866) (2,454)
Acquisition of businesses, net
of cash acquired - (622,145)
Maturity of short-term
investments, net - 65,893
Proceeds from sale of assets
held for disposal - 20,000
-------------- --------------
Cash used in investing activities (57,747) (582,303)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common shares 589,150 109,604
Repurchase of common shares (119,987) -
Advance of Executive Stock
Purchase Plan loans (9,988) -
Proceeds from the exercise of
warrants 29,093 6,010
Collection of warrant
subscription receivable - 2,287
Advances (repayments) under
revolving term credit facility,
net of financing costs (211,300) 207,000
Repayments of other long-term
obligations (193,366) (45,602)
Redemption of Convertible
Subordinated Preferred
Equivalent Debentures (11,349) -
Issuance of Convertible
Subordinated Preferred
Equivalent Debentures, net of
financing costs - 288,772
Repurchase of U.S. Dollar
Senior Notes - (141,017)
-------------- --------------
Cash provided by financing
activities 72,253 427,054
-------------- --------------
Effect of exchange rate changes
on cash and cash equivalents (229) (187)
-------------- --------------
Increase (decrease) in cash and
cash equivalents 309,747 (52,942)
Cash and cash equivalents,
beginning of year 125,144 178,086
-------------- --------------
Cash and cash equivalents,
end of year $ 434,891 $ 125,144
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