Biovail Reports Record Second Quarter 2002 Results.Business & Health/Medical Editors TORONTO--(BW HealthWire)--July 25, 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 ) (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :BVF)
- Revenues increased 39% for the quarter to $185.1 million -
- Second quarter diluted EPS of $0.39
increased 30% versus prior year -
- Cash flow from operations for the last twelve months
increased 19% to $273.2 million -
- Reiterates comfort with EPS growth in excess of 30% -
Biovail Corporation (NYSE, TSX:BVF) today reported record financial results for the three-month and six-month periods ending June June: see month. 30, 2002. Total revenues for the second quarter of 2002 increased 39% to $185.1 million, compared with $133.5 million reported for the second quarter of 2001. Total revenues for the six months ended June 30, 2002 were $340.4 million reflecting an increase of $87.7 million or 35% over the six months ended June 30, 2001. Net income increased 42% and was $62.6 million for the second quarter 2002 versus second quarter 2001 net income of $44.1 million. Net income for the six months ended June 30, 2002 of $115.6 million increased 58% versus $73.3 million for the prior year equivalent period. Second quarter 2002 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 30% to $0.39 per share versus $0.30 per share for the second quarter 2001. For the six months ended June 30, diluted earnings per share increased 40% to $0.70 per share for 2002 versus $0.50 per share for 2001. "In addition to strong financial results, Biovail's second quarter performance again reflect significant advancements in the execution of the Company's growth and strategic initiatives," commented 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 CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . Biovail's successful sales force expansion program continues resulting in an increase of more than 300 personnel in Biovail's U.S. sales organization since the beginning of 2002, bringing the total U.S. sales organization to over 600. Also during the quarter, the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. 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 results for 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) XL were presented at a leading medical conference and, after a ten-month review, Biovail received an Approvable Letter from the Food and Drug Administration (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. ) for this product, indicating acknowledgement that the FDA has reviewed the application and that Cardizem(R) XL is approvable. Two events during the quarter contributed significantly to Biovail's mid- mid- pref. Middle: midbrain. to long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth opportunities. With the second quarter acquisition of the well-established Vasotec Vas·o·tec A trademark for the drug enalapril maleate. enalapril maleate Innovace (UK), Vasotec Pharmacologic class: Angiotensin-converting enzyme (ACE) inhibitor Therapeutic class: (R) brand, Biovail can now pursue the commercialization of its clinically differentiated dif·fer·en·ti·ate v. dif·fer·en·ti·at·ed, dif·fer·en·ti·at·ing, dif·fer·en·ti·ates v.tr. 1. To constitute the distinction between: enalapril enalapril /enal·a·pril/ (e-nal´ah-pril) an angiotensin-converting enzyme inhibitor used as the maleate salt in the treatment of hypertension, congestive heart failure, and asymptomatic left ventricular dysfunction. formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation under the Vasotec(R) brand name. In addition, Biovail acquired the rights to numerous developmental products through the Company's investments in Ethypharm S.A. and DepoMed, Inc. "We expect to continue building upon existing pipeline and commercial opportunities through strategic licensing, development and acquisition initiatives," stated Mr. Melnyk. "These initiatives are expected to be complimentary to the organic growth derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from our base business driven by our expanding sales and marketing capabilities." Financial Results Product sales revenue of $157.8 million increased 29% during the second quarter 2002 versus second quarter 2001 and increased 25% to $287.6 million for the first half of 2002 versus first half 2001 primarily due to a strong sales performance by Biovail Pharmaceuticals USA and the recently acquired 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: (R), Teveten Tev·e·ten A trademark for the drug eprosartan mesylate. eprosartan mesylate Teveten Pharmacologic class: Angiotensin II receptor antagonist Therapeutic class: (R) and Vasotec(R) product lines. Gross margins were 73.8% for the second quarter ended June 30, 2002 and improved approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 130 basis points versus the prior quarter primarily due to sales mix sales mix See product mix. . Research and development expenses for the second quarter 2002 were $14.5 million reflecting an increase of 38% versus the first quarter 2002. The increase in research and development expenses reflects the increase in developmental and clinical programs associated with the advancement A gift of money or property made by a person while alive to his or her child or other legally recognized heir, the value of which the person intends to be deducted from the child's or heir's eventual share in the estate after the giver's death. of Biovail's extensive pipeline. Selling, general and administrative expenses were $39.0 million for the second quarter 2002 reflecting an increase of 59% over the prior year second quarter. The increase in these expenses is due to additions to sales organization personnel in excess of 300 and an increase in marketing expenditures in support of the Company's in-market products including Zovirax(R) and Teveten(R). Amortization expense for the second quarter 2002 increased to $14.0 million from $10.8 million for the second quarter 2001 primarily due to the Company's acquisition of a number of in-market brands including Zovirax(R), Teveten(R) and Vasotec(R). Second quarter 2002 interest income derived from cash balances was $1.0 million and second quarter 2002 interest expense was $10.2 million. The increase in second quarter 2002 interest expense versus first quarter 2002 interest expense is due to the Company's issuance of $400 million Senior Subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. Notes in March 2002. 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 the second quarter 2002 increased by 34% versus the second quarter 2001 to $76.4 million and was 41% of total revenues. Cash flows from operations for the first half of 2002 totaled $126.5 million and totaled $273.2 million for the twelve months ended June 30, 2002. ---------------------------------------------------------------------- 2002 Revenue and Earnings Per Share (EPS) Q3 2002 Q4 2002 Total Year Total Year Guidance Ranges Ranges 2002 2003 ---------------------------------------------------------------------- Total revenue (millions) $190 to $225 $215 to $250 $745 to $825 $950 to $1,050 ---------------------------------------------------------------------- Diluted EPS $0.45 to $0.50 $0.55 to $0.60 $1.70 to $1.80 $2.25 to $2.35 ---------------------------------------------------------------------- The Company will conduct a conference call with financial analysts to review the second quarter and first half 2002 results today at 8:30 a.m., Eastern Standard Time. A simultaneous webcast of the call for interested investors and others may be accessed by visiting Biovail's website at www.biovail.com. A replay of the conference call will also be available on this website after the call. Biovail Corporation is a 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, 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 STATEMENTS OF INCOME
(All dollar amounts are expressed in thousands of
U.S. dollars, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
------------------------ --------------------
2002 2001 2002 2001
--------- ---------- ---------- ---------
REVENUE
Product sales $ 157,788 $ 121,938 $ 287,642 $ 230,799
Research and
development 5,802 1,963 11,515 3,529
Co-promotion,
royalty and
licensing 21,541 9,603 41,227 18,403
--------- --------- --------- ---------
185,131 133,504 340,384 252,731
--------- --------- --------- ---------
EXPENSES
Cost of goods sold 41,291 27,321 77,007 53,662
Research and
development 14,453 13,675 24,921 24,845
Selling, general
and administrative 38,981 24,527 78,318 51,253
Amortization 14,019 10,849 26,528 21,451
--------- --------- --------- ---------
108,744 76,372 206,774 151,211
--------- --------- --------- ---------
Operating income 76,387 57,132 133,610 101,520
Interest income 1,047 579 2,561 1,157
Interest expense (10,170) (10,298) (11,863) (23,348)
--------- --------- --------- ---------
Income before
income taxes 67,264 47,413 124,308 79,329
Provision for
income taxes 4,707 3,310 8,700 6,060
--------- --------- --------- ---------
Net income $ 62,557 $ 44,103 $ 115,608 $ 73,269
========= ========= ========= =========
Diluted earnings
per share $ 0.39 $ 0.30 $ 0.70 $ 0.50
========= ========= ========= =========
Weighted average
number of common
shares outstanding
(000s) 161,423 147,933 164,885 147,735
========= ========= ========= =========
Prior year's figures reflect the reclassification of co-promotion
revenue from product sales to co-promotion, royalty and licensing to
conform with the presentation adopted in the current year.
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
June 30 December 31
2002 2001 ---------------------- ----------------------------
------------- --------------
ASSETS
Cash and cash equivalents $ 35,505 $ 434,891
Other current assets 205,179 141,705
Long-term investments 72,542 2,355
Property, plant and equipment, net 102,881 85,581
Goodwill, net 102,259 96,477
Intangible assets, net 996,666 556,360
Other assets, net 26,349 14,114
---------- ----------
$1,541,381 $1,331,483
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 219,454 $ 148,740
Deferred revenue 20,650 23,100
Long-term obligations 507,997 33,569
Shareholders' equity 793,280 1,126,074
---------- ----------
$1,541,381 $1,331,483 ====================== ============================
========== ==========
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
Six Months Ended
June 30
-----------------------
2002 2001
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 115,608 $ 73,269
Add items not involving cash
Depreciation and amortization 32,025 26,652
Amortization of deferred
financing costs 1,160 705
Amortization of discounts on
long-term obligations 2,074 7,115
Other items not involving cash 999 2,449
Net change in non-cash operating items (25,388) 27,222
--------- ---------
Cash flows from operating
activities 126,478 137,412
CASH FLOWS FROM INVESTING
ACTIVITIES (474,432) (31,750)
CASH FLOWS FROM FINANCING
ACTIVITIES (51,481) (162,518)
Effect of exchange rate changes
on cash and cash equivalents 49 (12)
--------- ---------
Decrease in cash and cash
equivalents (399,386) (56,868)
Cash and cash equivalents,
beginning of period 434,891 125,144
--------- ---------
Cash and cash equivalents,
end of period $ 35,505 $ 68,276
========= =========
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