Biovail Reports Record Third Quarter 2002 Results.Business Editors/Health/Medical Writers TORONTO--(BUSINESS WIRE)--Oct. 29, 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 37% for the quarter to $208.9 million -- Net income for the quarter increased 127% versus prior year or 31% versus prior year excluding certain items -- Cash flow from operations increased 59% to $357.9 million for the twelve months ended September 30, 2002 -- Reiterates comfort with EPS growth in excess of 30% Biovail Corporation (NYSE,TSX: BVF) today reported record financial results for the three-month and nine-month periods ending September September: see month. 30, 2002. Total revenues for the third quarter of 2002 increased 37% to $208.9 million, compared with $152.2 million reported for the third quarter of 2001. Total revenues for the nine months ended September 30, 2002 were $549.3 million reflecting an increase of $144.4 million or 36% over the nine months ended September 30, 2001. Net income increased 127% and was $75.0 million for the third quarter 2002 versus third quarter 2001 net income of $33.1 million. Net income for the nine months ended September 30, 2002 of $190.6 million increased 79% versus $106.4 million for the prior year equivalent period. Third 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 123% to $0.49 per share versus $0.22 per share for the third quarter 2001. For the nine months ended September 30, diluted earnings per share increased 66% to $1.18 per share for 2002 versus $0.71 per share for 2001. Excluding certain items, third quarter 2002 net income of $73.0 million increased 31% versus net income of $55.8 million for the third quarter 2001. Net income excluding certain items for the nine months ended September 30, 2002 increased 46% to $188.7 million versus $129.1 million excluding certain items for the prior year equivalent period. Excluding certain items, third quarter 2002 diluted earnings per share increased 27% to $0.47 per share versus $0.37 per share for the third quarter 2001. Excluding certain items, diluted earnings per share increased 36% to $1.17 per share versus $0.86 per share for the nine months ended September 30, 2002 and 2001 respectively. The items excluded from the third quarter and nine months ended September 30, 2002 calculations above are the net gain of $3.3 million related to interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. entered into by the Company and the $1.4 million write down of certain intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. as described below. The charge excluded from the third quarter and nine months ended September 30, 2001 relates to the $22.7 million premium paid on the conversion of $165.5 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. . During the third quarter 2002, the Company wrote down certain intangible assets by $1.4 million. This charge related to the write off of the remaining unamortized product right asset balance related to Cardiac cardiac /car·di·ac/ (-ak) 1. pertaining to the heart. 2. pertaining to the cardia. car·di·ac adj. 1. Of, near, or relating to the heart. 2. STATus (approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $800 thousand). This non-core diagnostic product is no longer being promoted through Biovail Pharmaceuticals 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 as this division is now more focused on larger growth opportunities. Additionally, the Company recorded an unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. (approximately $600 thousand) in the asset value of its small investment in Hemispherx Biopharma Inc. given the reduction in this company's share price. Management utilizes a measure of net income and diluted earnings per share on a basis that excludes certain items. This measure is a non-GAAP 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 and, as such, is not necessarily comparable to similarly titled measures presented by other companies. Management has consistently applied this measure when discussing earnings or earnings guidance and will continue to do so going forward. This measure is provided to assist our investors in assessing the Company's operating performance. 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 items were excluded because they were considered to be of a non-operational nature in the applicable period. Investors should consider this non-GAAP measure in the context of the Company's U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). 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 and Chief Executive Officer, commented, "In addition to Biovail's strong financial performance, the Company achieved another significant developmental milestone developmental milestone Pediatrics Any of a series of activities, eg, raising the head, rolling over, walking or other significant points in a child's physical and/or mental development that may be used to assess maturation and detect developmental delays. with the August filing of a New Drug Application by GlaxoSmithKline GlaxoSmithKline plc (LSE: GSK NYSE: GSK) is a British based pharmaceutical, biological, and healthcare company. GSK is a research-based company with a wide portfolio of pharmaceutical products covering anti-infectives, central nervous system (CNS), respiratory, for our once-daily formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation of Wellbutrin Well·bu·trin A trademark for the drug bupropion hydrochloride, used to treat depression. bupropion hydrochloride Budeprion SR, Budeprion XL, Wellbutrin, Wellbutrin SR, Wellbutrin XL, Zyban . As well, the Company anticipates receiving final marketing approval and launch to the trade of 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 later this quarter. Our U.S. sales force is achieving success in establishing relationships with high prescribing doctors through the co-promotion Co-promotion is a marketing practice where a company in addition to its own, uses another company's sales force to promote the same brand or range of brands. The term is frequently confused with Co-marketing. See also Marketing co-operation of Wellbutrin SR and have demonstrated their effectiveness given the recent increases in prescription prescription In property law, the effect of the lapse of time in creating and destroying rights. Acquisitive prescription allows an individual, after unequivocal possession for a specific period, to acquire an interest in real property, such as an easement, but not the trends for Teveten Tev·e·ten A trademark for the drug eprosartan mesylate. eprosartan mesylate Teveten Pharmacologic class: Angiotensin II receptor antagonist Therapeutic class: (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: (R)." Financial Results Product sales revenue of $174.5 million increased 32% during the third quarter 2002 versus third quarter 2001 and increased 27% to $462.2 million for the first nine months of 2002 versus the first nine months of 2001 primarily due to strong sales of 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. products including the recent launch of generic Adalat Ad·a·lat A trademark for the drug nifedipine. CC 90mg, Cardizem(R) CD sales and the recently acquired Zovirax, Teveten(R) and 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) product lines. Gross margins were 74.8% for the third quarter ended September 30, 2002 reflecting an improvement of approximately 100 basis points versus the prior quarter and 240 basis points versus third quarter 2001 primarily due to sales mix sales mix See product mix. . Research and development expenses for the third quarter 2002 were $14.6 million reflecting an increase of 22% versus the third quarter of 2001. 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 $44.9 million for the third quarter 2002 reflecting an increase of 70% over the prior year third quarter. The increase in these expenses versus the prior year period is primarily due to the addition of over 300 employees to our U.S. sales organization and significant increases in advertising and promotional expenditures in support of the Company's in-market products including Zovirax and Teveten(R). Amortization expense for third quarter 2002 increased to $16.0 million from $11.1 million for the third quarter 2001 primarily due to the Company's acquisition of a number of in-market brands including Zovirax, Teveten(R) and Vasotec(R). Third quarter 2002 interest expense was $11.0 million versus $7.0 million of interest expense for the prior year third quarter. The increase in third 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 and the conversion of $165.5 million of convertible debentures which lowered interest expense in the third quarter 2001. 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 third quarter 2002 increased by 33% versus the third quarter 2001 to $88.0 million and was 42% of total revenues. Cash flows from operations for the third quarter 2002 of $115.4 million, an increase of approximately eight times versus the prior quarter. Cash flows from operations were $241.9 million for the first nine months of 2002 reflecting an increase of 44% versus the prior year comparable period. Cash flows from operations increased 59% to $357.9 million for the twelve months ended September 30, 2002 as compared to $383.5 million of net debt at September 30, 2002. Also during the quarter, the Company completed a stock buy back program whereby the Company bought back a total of 1.9 million shares at an average price of $24.64 per share. The Company also received approximately $112 million from the exercise of approximately 2.8 million warrants. Additionally, the Company completed interest rate swap transactions converting $200 million of 7.875% fixed rate Notes in exchange for floating rate interest payments based on six-month LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). rates, plus a small spread. Biovail also reiterates its previously announced revenue and earnings guidance as follows: Revenue and Earnings Per Q4 2002 Full Year 2002 Full Year 2003 Share (EPS) Guidance Ranges Ranges Ranges ---------------------------------------------------------------------- Total revenue (millions) $215 to $250 $745 to $825 $950 to $1,050 ---------------------------------------------------------------------- Diluted EPS $0.55 to $0.60 $1.70 to $1.80 $2.25 to $2.35 ---------------------------------------------------------------------- Biovail management will conduct a conference call to review the financial results for the third quarter and first nine months of 2002 today at 8:30 a.m., Eastern Standard Time. Those wishing to access this call may dial 877/823-6611 (U.S. and Canada) or 416/640-4127 (International). A replay of the conference call will be available until 7:00 p.m. E.S.T. on Tuesday Tuesday: see week. , November November: see month. 5, 2002 by dialing 877/289-8525 (U.S. and Canada) or 416/640-1917 (International), with access code 214335. 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 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. 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 Nine Months Ended
September 30 September 30
------------------- -------------------
2002 2001 2002 2001
-------- -------- -------- --------
REVENUE
Product sales $174,508 $132,676 $462,150 $363,475
Research and development 7,653 6,588 19,168 10,117
Co-promotion, royalty
and licensing 26,783 12,926 68,010 31,329
-------- -------- -------- --------
208,944 152,190 549,328 404,921
-------- -------- -------- --------
EXPENSES
Cost of goods sold 44,007 36,621 121,014 90,283
Research and development 14,626 12,018 39,547 36,863
Selling, general and
administrative 44,922 26,422 123,240 77,675
Amortization 15,994 11,107 42,522 32,558
Write-down of assets 1,369 -- 1,369 --
-------- -------- -------- --------
120,918 86,168 327,692 237,379
-------- -------- -------- --------
Operating income 88,026 66,022 221,636 167,542
Interest income 298 504 2,859 1,661
Interest expense (10,956) (6,969) (22,753) (30,317)
Other income 3,309 -- 3,243 --
Debt conversion premium -- (22,731) -- (22,731)
-------- -------- -------- --------
Income before provision
for income taxes 80,677 36,826 204,985 116,155
Provision for income taxes 5,700 3,725 14,400 9,785
-------- -------- -------- --------
Net income $ 74,977 $ 33,101 $190,585 $106,370
-------- -------- -------- --------
-------- -------- -------- --------
Diluted earnings per share $ 0.49 $ 0.22 $ 1.18 $ 0.71
-------- -------- -------- --------
-------- -------- -------- --------
Net income $ 74,977 $ 33,101 $190,585 $106,370
Add (deduct) certain items
Write-down of assets 1,369 -- 1,369 --
Other income (3,309) -- (3,243) --
Debt conversion premium -- 22,731 -- 22,731
-------- -------- -------- --------
Net income excluding
certain items $ 73,037 $ 55,832 $188,711 $129,101
-------- -------- -------- --------
-------- -------- -------- --------
Diluted earnings per share
excluding certain items $ 0.47 $ 0.37 $ 1.17 $ 0.86
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average number of
common shares
outstanding (000s) 154,016 152,428 161,235 149,308
-------- -------- -------- --------
-------- -------- -------- --------
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.
Management utilizes a measure of net income and diluted earnings per
share on a basis that excludes certain items. This measure is a
non-GAAP measure that does not have a standardized meaning and, as
such, is not necessarily comparable to similarly titled measures
presented by other companies. Management has consistently applied this
measure when discussing earnings or earnings guidance and will
continue to do so going forward. This measure is provided to assist
our investors in assessing the Company's operating performance.
Management believes that most of our investors prefer to analyze the
Company's results based on this measure as it is consistent with
industry practice. The items were excluded because they were
considered to be of a non-operational nature in the applicable period.
The excluded items are also disclosed to give investors the ability to
further analyze the Company's results. Investors should consider this
non-GAAP measure in the context of the Company's U.S. GAAP results.
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
September 30 December 31
2002 2001
------------ -------------
ASSETS
Cash and cash equivalents $ 145,051 $ 434,891
Other current assets 190,075 141,705
Long-term investments 80,491 2,355
Property, plant and equipment, net 118,278 85,581
Goodwill, net 102,212 96,477
Intangible assets, net 979,536 556,360
Other assets, net 43,330 14,114
------------ -------------
$1,658,973 $1,331,483
------------ -------------
------------ -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 217,318 $ 148,740
Deferred revenue 19,425 23,100
Long-term obligations 495,076 33,569
Shareholders' equity 927,154 1,126,074
------------ -------------
$1,658,973 $1,331,483
------------ -------------
------------ -------------
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
Nine Months Ended
September 30
-----------------------
2002 2001
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 190,585 $ 106,370
Add (deduct) items not involving cash
Depreciation and amortization 50,385 40,571
Amortization of deferred
financing costs 2,016 1,159
Amortization of discounts on
long-term obligations 3,928 9,467
Debt conversion premium -- 22,731
Other items not involving cash (375) 4,187
Net change in non-cash operating items (4,638) (16,350)
---------- ----------
Cash flows from operating activities 241,901 168,135
CASH FLOWS FROM INVESTING ACTIVITIES (498,123) (51,108)
CASH FLOWS FROM FINANCING ACTIVITIES (33,654) (214,340)
Effect of exchange rate changes
on cash and cash equivalents 36 (62)
---------- ----------
Decrease in cash and cash equivalents (289,840) (97,375)
Cash and cash equivalents,
beginning of period 434,891 125,144
---------- ----------
Cash and cash equivalents,
end of period $ 145,051 $ 27,769
---------- ----------
---------- ----------
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion