TORONTO, May 15, 2014 /CNW/ - Concordia Healthcare Corp. ("Concordia" or the "Company") (TSX: CXR) (OTCQX: CHEHF), a diverse healthcare company focused on
legacy pharmaceutical products, orphan drugs, and medical devices for
the diabetic population, today announced its financial and operational
results for its first quarter, ended March 31, 2014.
The Company went public in December 2013 so there is no comparative
period for the prior year. All financial references are in U.S. dollars
unless otherwise noted.
First Quarter 2014 Financial Highlights
3 Months Ended March 31, 2014
Earnings per share basic
Earnings per share diluted
Cash and cash equivalents
Senior and subordinate debt
First Quarter 2014 Operational Highlights
On January 6, 2014, signed a five-year exclusive distribution agreement
with Lachlan Pharma Holdings for the distribution of Ulesfia® Lotion in
the United States;
On March 11, 2014, completed a short-form prospectus offering, on a
bought deal basis of 5,750,000 common shares of Concordia, which
included the exercise by the underwriters of an over-allotment option
of 15 percent, for net proceeds to the Company, after the deduction of
underwriters' fees, of Cdn$63,508,750;
On March 20, 2014, the Company announced it had entered into a
definitive agreement to acquire Donnatal®, an adjunctive therapy in the
treatment of irritable bowel syndrome and acute enterocolitis, from a
privately held specialty pharmaceutical company carrying on business as
Revive Pharmaceuticals. The Company has agreed to acquire Donnatal® for
$200,000,000 in cash and an aggregate of 4,605,833 common shares of
Concordia. Closing of this transaction is subject to customary closing
conditions and is anticipated to close shortly. In the 2013 calendar
year, Donnatal generated approximately $49,800,000 in revenues.
On March 20, 2014, the Company announced it had entered into a
commitment letter with GE Capital, Healthcare Financial Services and
its affiliated entities ("GE") whereby GE agreed to provide a secured
credit facility having a principal amount of up to US$195,000,000,
consisting of a US$170,000,000 term loan and a US$25,000,000 operating
line (the "GE Financing"), with such credit facility being subject to a
number of customary conditions, including entering into definitive
documentation. The GE Financing is anticipated to close shortly.
On March 28, 2014, the Company paid in full its senior and subordinate
debt as at December 31, 2013, of $14,966,000.
On March 30, 2014, due to management's and the board of directors'
continued confidence in the Company's financial strength, Concordia's
board of directors approved a $0.30 per common share annualized
'eligible' dividend with $0.075 per common share being paid to
shareholders on a quarterly basis. With respect to the second quarter
of 2014, a record date of April 15, 2014 was declared with distribution
of proceeds on April 30, 2014. Declarations and payments are made in
Subsequent to March 31, 2014, Concordia's board of directors approved a
$0.075 dividend per common share. A record date of July 15, 2014 is
expected to be declared with a distribution of proceeds expected to
occur on July 31, 2014. Declarations and payments will be made in U.S.
dollars. All future quarterly dividends will be subject to quarterly
financial review and board approval.
Going forward, the Company plans to grow its businesses by:
supplementing its existing portfolio by acquiring or in-licensing
additional legacy products;
expanding its Specialty Healthcare Distribution Division by distributing
developing Photofrin for new indications including cholangiocarcinoma;
acquiring additional orphan drugs.
"During the first 90 days of 2014, we signed a key license agreement,
fortified our cash position, set the stage for the proposed acquisition
of Donnatal, retired our senior and subordinate debt, and announced a
dividend," said Mark Thompson, Chief Executive Officer of Concordia.
"The momentum we created in the first quarter is expected to continue
in the second quarter due to the expected closing of each of the
Donnatal transaction and GE debt transaction. Looking ahead, we intend
to keep aggressively building Concordia Healthcare."
First Quarter 2014 Financial Results
The Company's net revenue for the reporting period was $16,810,000 while
gross profit for the reporting period was $12,956,000.
Net revenue and gross profit are derived from Concordia's Legacy
Pharmaceuticals Division, its Orphan Drugs Division, and its Specialty
Legacy Pharmaceuticals Division
Net revenues for the Legacy Pharmaceuticals Division were $9,309,000 for
the period ended March 31, 2014 and related to the sales of Kapvay,
Orapred ODT, Orapred OS and Ulesfia after subtracting deductions from
Gross Sales such as chargebacks, returns and allowances, rebates and
other deductions that are customary in the industry.
Cost of sales for the period ended March 31, 2014 were $2,210,000 and
reflect the costs of active pharmaceutical ingredients, excipients,
packaging and freight costs and royalties.
Gross Profit for the period ended March 31, 2014 was $7,099,000.
Orphan Drugs Division
The operations of Concordia's Orphan Drugs Division commenced on
December 20, 2013 with the acquisition of Pinnacle Biologics Inc. The
Orphan Drugs Division is intended to provide growth opportunities
through the expansion into new indications for existing products or the
acquisition of approved orphan drugs and further expansion within their
identified markets and new indications.
Net revenues for the Orphan Drugs Division were $3,570,000 for the
period ended March 31, 2014 and related primarily to sales of
Photodynamic therapy (PDT) with PHOTOFRIN®. Photodynamic therapy (PDT)
with PHOTOFRIN® is Concordia's commercial oncology drug for the
treatment of certain forms of cancer.
Cost of sales for the period ended March 31, 2014 were $700,000 and
reflect the cost of manufactured products sold, quality assurance and
Gross Profit for the period ended March 31, 2014 was $2,870,000.
Specialty Healthcare Distribution Division
Net revenues for the Specialty Healthcare Distribution division were
$3,931,000 for the period ended March 31, 2014 and related primarily to
sales and distribution of diabetes testing supplies and orthotics for
Costs of sales for the period ended March 31, 2014 were $944,000 and
reflect the cost of products, warehousing and freight.
Gross profit for the period ended March 31, 2014 was $2,987,000.
Overall for the Company, operating income for the period ending March
31, 2014, was $4,939,000.
Operating expenses for the period ended March 31, 2014 were $8,017,000,
including general and administrative expenses, which were $4,691,000,
selling expenses of $944,000, acquisition-related costs of $174,000,
share-based compensation of $756,000, and research and development
costs of $1,418,000.
Net cash used in operating activities was $3,042,000 for the year ended
March 31, 2014 and was primarily related to the payment of accounts
payable and deposits on inventory purchases.
As at March 31, 2014 the Company had 23,861,246 common shares issued and
outstanding, and 26,100,000 on a fully diluted basis
Conference Call Notification
Management will host a conference call to discuss the first quarter,
2014 results on Thursday, May 15, 2014 at 8:30 am ET. Following
management's presentation, there will be a question-and-answer session.
To participate in the conference call, please dial (888) 231-8191 or
A digital conference call replay will be available until midnight on May
29, 2014 (ET) by calling (855) 859-2056 or (416) 849-0833. Please enter
the password 42708932 when instructed. A webcast replay will be
available for 365 days by accessing a link through the Events section
at visit www.concordiarx.com
Concordia is a diverse healthcare company focused on legacy
pharmaceutical products, orphan drugs, and medical devices for the
diabetic population. The company's legacy pharmaceutical business
consists of an ADHD-treatment drug, Kapvay® (clonidine extended release
tablets), Ulesfia® (benzyl alcohol) Lotion a Head Lice Treatment, and
an Asthma-related medication, Orapred ODT® (prednisolone sodium
phosphate orally disintegrating tablets). Concordia's Specialty
Healthcare Distribution (SHD) division (Complete Medical Homecare)
distributes medical supplies targeting diabetes and related conditions.
Concordia's orphan division, Pinnacle, markets Photofrin® in the United
Concordia operates out of facilities in Oakville, Ontario, Lenexa,
Kansas (near Kansas City, Missouri), Bannockburn, (near Chicago),
Illinois and Bridgetown, Barbados.
1As used herein, EBITDA is defined as net income adjusted for net
interest expense, income tax expense, depreciation and amortization.
Management uses EBITDA to assess the Company's operating performance. A
reconciliation of net income to EBITDA is provided below.
2As used herein, adjusted EBITDA is defined as EBITDA adjusted for
one-time charges associated with acquisitions, one-time charges
associated with the Company's listing on the TSX, non-cash items such
as unrealized gains / losses on derivative instruments, and realized /
unrealized gains/losses related to foreign exchange revaluation.
Management uses adjusted EBITDA as a 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.
This press release makes reference to certain non-IFRS measures. 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 for analyses of the
Company's financial information reported under IFRS. Management uses
non-IFRS measures such as EBITDA and Adjusted EBITDA to provide
investors with a supplemental measure 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, and to assess its ability to
meet future debt service, capital expenditure, and working capital
Notice regarding forward-looking statements:
This release includes forward-looking statements regarding Concordia and
its business, which may include, but is not limited to, statements with
respect to the acquisition of Donnatal®, the impact of the acquisition
of Donnatal® on Concordia's financial performance, the closing of the
GE Financing, Concordia's financial strength, the payment of dividends
in respect of Concordia's common shares, Concordia's growth, the
expansion into new indications for Concordia's existing products, the
acquisition of additional products (including orphan drugs and legacy
products), in-licencing additional products, the distribution of
additional products and other factors. Often, but not always,
forward-looking statements 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 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 regarding the
pharmaceutical industry, the failure to obtain regulatory approvals,
the failure to close the acquisition of Donnatal® and/or the GE
Financing, risks associated with the acquisition of Donnatal® and other
products, economic factors, market conditions, the equity markets
generally, risks associated with growth and competition 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, there may be other factors that cause
actions, events or results to differ from those anticipated, estimated
or intended. No forward-looking statement can be guaranteed. Except as
required by applicable securities laws, forward-looking statements
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, whether as a result of new information,
future events, or otherwise.
SOURCE: Concordia Healthcare Corp.
For further information:
please visit www.concordiarx.com or contact:
Kristen Van Vogt
416-815-0700 x 244
416-815-0700 x 225