Biovail Reports First-Quarter 2007 Financial Results, Plans to File Amended 2006 Form 20-F
Company Records Total Revenues of $247 Million;
GAAP Diluted EPS of $0.58;
Cash Flow From Operations of $120 Million;
Operating Margins of 40%;
Company Reaffirms 2007 Financial Guidance
TORONTO, May 10 /CNW/ - Biovail Corporation (NYSE/TSX: BVF) today
announced financial results for the three-month period ended March 31, 2007.
The Company also announced its intention to file an amended and restated Form
20-F for the fiscal year ended December 31, 2006, and such other reports as
may be required, as a result of the understatement of Biovail's reported net
income for fiscal 2005 and 2006 in the amount of $10.2 million and $7.7
million, respectively. The comparative figures for the first quarter, and as
at the year-end of 2006 that are contained in this news release, have been
restated to reflect the correction of these understatements. For further
detail regarding the restatement, see the section entitled "Restatement
Information" before the conference-call details below. To the extent that this
news release contains forward-looking statements, investors are cautioned that
these are based on the Company's current views, and actual outcomes are not
certain. For more information, see the note on forward-looking information
following the conference-call details below.
Total revenues for the three months ended March 31, 2007 were $247.0
million, compared with $222.6 million for the first quarter of 2006, an
increase of 11%. First-quarter 2007 net income, in accordance with United
States Generally Accepted Accounting Principles (GAAP), was $93.8 million,
compared with $68.4 million for the corresponding 2006 period. GAAP diluted
earnings per share (EPS) for the first quarter of 2007 were $0.58, versus
$0.43 for the first quarter of 2006.
GAAP net income and EPS figures for the first quarter of 2007 were
negatively impacted by a $0.6-million restructuring charge related to the
December 2006 restructuring of the Company's U.S. commercial operations. In
the first quarter of 2006, Biovail incurred a $4.1-million loss from
discontinued operations related to the sale of the Company's Nutravail
division.
"Despite the loss of exclusivity on the 300mg strength of Wellbutrin
XL(R), we have begun 2007 on solid footing," said Biovail Chief Executive
Officer Dr. Douglas Squires. "Biovail's business remains strong. Our
confidence in Ultram(R) ER is further supported by recent prescription trends,
and with an FDA action date for BVF-033 in July and a maturing development
pipeline, Biovail is entering a new-product cycle that should drive long-term
growth for the Company."
Wellbutrin XL(R) Settlement
On March 5, 2007, Biovail announced that following a review by the
Federal Trade Commission that was requested by the parties, a comprehensive
settlement had been reached with Anchen Pharmaceuticals LLP, Impax
Laboratories, Inc., Watson Pharmaceuticals, Inc. and Teva Pharmaceutical
Industries Ltd. related to Wellbutrin XL(R). The settlements include, among
other things, the dismissal of Biovail's patent-infringement actions against
each of Impax and Watson related to their abbreviated new drug applications
for generic formulations of Wellbutrin XL(R). Under the terms of the
agreement, with defined exceptions, none of Teva, Anchen, Impax, and Watson
may market a generic version of the 150mg strength of Wellbutrin XL(R) until
2008. For more information, see the news release issued March 5, 2007,
"Biovail Announces Comprehensive Settlement Related to Wellbutrin XL(R)."
First-Quarter 2007 Financial Performance
Product revenues for the first quarter of 2007 were $238.0 million,
compared with $211.8 million in the first quarter of 2006, an increase of 12%
that reflects higher revenues from several product lines, including Ultram(R)
ER, Zovirax(R), Cardizem(R) LA, and Biovail's portfolio of generic products.
Partially offsetting factors included lower revenues from Wellbutrin XL(R) and
Biovail Pharmaceuticals Canada (BPC).
Product revenues for Wellbutrin XL(R) were $61.4 million in the first
quarter of 2007, compared with $65.0 million in the first quarter of 2006.
Wellbutrin XL(R) revenues in the first quarter of 2007, were impacted by the
December 2006 launch of a generic formulation of the 300mg strength of the
product. In the first quarter of 2007, the generic formulation captured 74% of
the 300mg dosage strength's total prescription volume. First-quarter 2007
Wellbutrin XL(R) revenues reflect initial shipments in support of the
product's European launch by marketing partner GlaxoSmithKline (GSK).
Launched in February 2006 by marketing partner Ortho-McNeil, Inc. (OMI),
Ultram(R) ER generated revenues of $30.0 million in the first quarter of 2007,
compared with $15.1 million in the first quarter of 2006. Ultram(R) ER's
performance in the first quarter of 2007 reflects a recent price increase, an
increase in Biovail's supply price from 27.5% to 37.5% of OMI's net selling
price, and higher sample revenues. In the first quarter of 2007, Ultram(R) ER
captured 5.5% of total prescription volume for the Ultram(R) brand (including
generics). On May 9, 2007, Biovail Laboratories International SRL, along with
OMI, Purdue Pharma Products L.P., and Napp Pharmaceutical Group Ltd.,
initiated patent-infringement litigation against Par Pharmaceutical Companies,
Inc. (Par) related to its abbreviated new drug application (ANDA) for a
generic formulation of the 200mg dosage strength of Ultram(R) ER tablets. This
infringement action alleges that Par's generic formulation infringes U.S.
Patent No. 6,254,887, which is listed in the Orange Book for Ultram(R) ER.
Pursuant to the provisions of the Hatch-Waxman Act, the U.S. Food and Drug
Administration (FDA) will not approve Par's product for a period of 30 months,
or until the patent-infringement litigation is resolved, and such resolution
is in favour of Par, whichever occurs first. Biovail currently has two patent
applications being prosecuted by the U.S. Patent and Trademark Office, which
if approved, will be added to the Orange Book for Ultram(R) ER.
First-quarter 2007 revenues for Biovail's Zovirax(R) franchise were $37.3
million, compared with $24.5 million in the prior-year period, an increase of
52% that reflects the impact of a recent price increase for the product line,
and an increase in inventories at the wholesaler level from two weeks to four
weeks. In the first quarter of 2007, Zovirax(R) Ointment and Zovirax(R) Cream
held a combined 72.4% share of the topical herpes market, an increase of 3.2
percentage points in market share versus first-quarter 2006 levels.
Revenues from BPC were $13.8 million in the first quarter of 2007,
compared with $19.8 million in the first quarter of 2006, a decline of 30%
that reflects the continued erosion of Tiazac(R) and Wellbutrin(R) SR due to
generic competition. Total prescription volume for Tiazac(R) and Wellbutrin(R)
SR decreased 86% and 40%, respectively, in the first quarter of 2007, versus
the comparable period in 2006. Partially offsetting factors include the
continued growth in Tiazac(R) XC, where total prescription volume increased
40% year over year, and Wellbutrin(R) XL, which was launched by the BPC sales
force in April 2006. Biovail is currently exploring a number of acquisition
opportunities to expand BPC's commercial portfolio.
In the first quarter of 2007, Cardizem(R) LA generated revenues of $23.9
million, compared with $18.3 million for the corresponding period in 2006,
which reflects the first-quarter 2007 fulfillment of back orders for the 120mg
and 180mg strengths of the product. The amortization of deferred revenues
associated with the May 2005 Kos transaction positively impacted Cardizem(R)
LA revenues by $3.8 million in the first quarters of both 2006 and 2007.
Legacy products generated revenues of $35.6 million for the first quarter
of 2007, compared with $35.5 million in the first quarter of 2006. This
performance reflects the positive impact of price increases implemented in
2006 and the first quarter of 2007, offset by the expected year-over-year
declines in overall prescription volumes for these mature products.
Product revenue for Biovail's portfolio of generic products was $35.9
million in the first quarter of 2007, compared with $33.6 million in the first
quarter of 2006, representing growth of 7%. This performance reflects higher
prescription volumes for Biovail's generic formulation of Procardia XL,
partially offset by declines in prescription volumes for the Company's generic
formulations of Cardizem(R) CD and Voltaren(R) XR. Total prescription volume
for Biovail's portfolio of generic products decreased 1% in the first quarter
of 2007, compared with the corresponding period in 2006.
The following table summarizes Biovail's product revenue performance in
the first quarter of 2007:
($000s) Q1/07 Revenues Q1/06 Revenues Change (%)
----------------------------------------------------------------------
Wellbutrin XL(R) 61,405 65,004 (6%)
Ultram(R) ER 30,019 15,111 99%
Zovirax(R) 37,283 24,474 52%
Biovail Pharmaceuticals
Canada 13,826 19,780 (30%)
Cardizem(R) LA 23,949 18,316(*) 31%
Legacy Products 35,640 35,529 0%
Generics 35,880 33,597 7%
----------------------------------------------------------------------
Total Product Revenues 238,002 211,811(*) 12%
----------------------------------------------------------------------
(*) Restated
Research-and-development revenue was $4.8 million in the first quarter of
2007, compared with $4.9 million in the corresponding period in 2006.
Royalty and other revenue was $4.2 million in the first quarter of 2007,
compared with $5.9 million in the first quarter of 2006. The decrease reflects
the termination of Biovail's co-promotion efforts for Ultram(R) ER, and lower
royalty revenues on Tiazac(R), Cardizem(R) CD and Tricor.
Cost of goods sold for the first quarter of 2007 was $56.4 million,
compared with $47.2 million in the first quarter of 2006. Gross margins on
product revenues were 76% in the first quarter of 2007, compared with 78% in
the first quarter of 2006, reflecting lower sales volumes for 300mg tablets of
Wellbutrin XL(R) and Biovail's one-third share of the costs associated with
GSK's license agreement with Watson Pharmaceuticals, Inc. related to
Wellbutrin XL(R) 150mg, partially offset by price increases and Biovail's
higher supply price for Ultram(R) ER in 2007.
Research-and-development expenditures for the first quarter of 2007 were
$29.7 million, compared with $22.3 million for the first quarter of 2006. This
33% year-over-year increase reflects increased activity within Biovail's
early-stage development pipeline, and higher costs associated with BVF-146
(currently in Phase III development), BVF-033 and BVF-012. Biovail is actively
engaged in discussions with a number of potential partners for the
commercialization rights to these products. With respect to other ongoing
pipeline programs, Biovail anticipates the submission of at least one
regulatory application to the FDA in 2007.
Selling, general and administrative (SG&A) expenses for the first quarter
of 2007 were $49.6 million, compared with $56.6 million in the first quarter
of 2006, a decrease of 12% that reflects Biovail's restructured approach to
commercializing products in the U.S., and an associated reduction in headcount
in the Company's U.S. commercial operations group; partially offset by
increased legal costs. Biovail incurred $4.2 million in stock-based
compensation costs in the first quarter of 2007, compared with $6.9 million in
the corresponding period in 2006, the majority of which is recorded in SG&A
expenses.
Amortization expense in the first quarter of 2007 was $12.0 million,
compared with $14.8 million in the first quarter of 2006, a decrease of 19%
that primarily reflects the third-quarter 2006 write-down of intangible assets
associated with Vasotec(R) and Glumetza(TM).
Operating income for the first quarter of 2007 was $98.6 million,
compared with $81.7 million in the corresponding period in 2006. As a
percentage of revenues, operating income was 39.9% in the first quarter of
2007, compared with 36.7% in the first quarter of 2006.
Specific Items Affecting Operations
In the first quarter of 2007, Biovail incurred an additional $0.6-million
charge related to the December 2006 restructuring of the Company's U.S.
commercial operations.
In the first quarter of 2006, Biovail amended its purchase-and-sale
agreement with Futuristic Brands USA, Inc. related to Nutravail. As such,
Biovail incurred a $2.8-million write-down of Nutravail's assets, which was
included in the $4.1-million, first-quarter 2006 loss from discontinued
operations.
Balance Sheet & Cash Flow
At the end of the first quarter of 2007, Biovail had cash balances of
$870 million. Effective April 1, 2007, Biovail redeemed all of its outstanding
7 7/8% Senior Subordinated Notes for a total cash outlay of $422 million,
which includes accrued interest and a 1.969% premium for the early redemption
of the Notes. Following the redemption, and the final payment on the
Zovirax(R) obligation on April 2, 2007, Biovail is debt-free.
Cash flow from operations was $119.8 million in the first quarter of
2007, compared with $94.7 million in the first quarter of 2006, an increase of
27%. Net capital expenditures in the first quarter of 2007 amounted to $5.7
million, compared with $17.9 million in the prior-year period. Capital
expenditures in 2006 reflect the expansion of the Company's manufacturing
facility in Steinbach, Manitoba, which is now complete. In the first quarter
of 2007, Biovail made dividend payments totaling $80.2 million ($0.50 per
share).
2007 Financial Guidance
Biovail is reaffirming its 2007 guidance for total revenues of $800
million to $850 million; diluted EPS of $1.70 to $1.80 (excluding specific
items), and cash flows from operations of $320 million to $340 million.
As before, Biovail's revenue guidance is based on a number of variables,
including current prescription and business trends, and the success of the
Company's strategic marketing and distribution partners. Biovail's 2007
financial guidance assumes that a generic formulation of the 150mg strength of
Wellbutrin XL(R) is not launched in 2007. In addition, 2007 guidance does not
include the impact of any potential acquisitions or dispositions; the
introduction of new generic formulations of the Company's other key products;
any new supply-and-distribution agreements; restructuring; settlements or
other specific charges.
Restatement Information
Biovail will file an amended and restated Form 20-F for 2006, and such
other reports as may be required, to correct for the effects of the following
error in the computation of amortization expense, which is a non-cash item.
During the 2007 first-quarter financial statement close process, the
Company detected a data error in a supporting schedule used to (a) track
quantities of Zovirax(R) products that the Company may purchase at reduced
supply prices from GSK, and (b) calculate amortization expense of the
long-term asset being amortized to cost of goods sold relative to the amount
of Zovirax(R) that can be purchased at those reduced supply prices. As a
result of this error, cost of goods sold in the accompanying consolidated
statement of income for the three months ended March 31, 2006 has been
restated to adjust for an overstatement of amortization expense in the amount
of $2.1 million, and the resulting understatement of net income in the amount
of $2.1 million. Cost of goods sold in the Company's consolidated statement of
income for fiscal 2005 and 2006 will be restated to adjust for an
overstatement of amortization expense in the amount of $5.2 million and $12.1
million, respectively, and a corresponding understatement of net income in the
same amounts. In the restated consolidated balance sheet at December 31, 2006,
that accompanies this release, the cumulative effect of this error in fiscal
years 2005 and 2006 resulted in an increase of $17.3 million to other assets,
with a corresponding adjustment to deficit in shareholders' equity.
As a result of this restatement, the Company is required to correct other
known errors in prior-year periods that were previously deemed to be
immaterial. The Company identified two such instances - one related to foreign
exchange, the other related to Cardizem(R) LA.
Accordingly, Biovail has adjusted the accompanying consolidated statement
of income for the three months ended March 31, 2006 for a misstatement related
to the accounting for foreign exchange, which is a non-cash item, in the
amount of $0.3 million. For fiscal 2005, the effect of this restatement is to
increase net income by $2.2 million; while in 2003 the net loss is increased
by $2.9 million, and in 2004 and 2006 net income is reduced by $1.2 million
and $1.6 million, respectively. In the accompanying consolidated balance sheet
at December 31, 2006, the cumulative effect of this misstatement in fiscal
years 2003 through 2006 resulted in an increase of $3.5 million to accumulated
other comprehensive income, with a corresponding adjustment to deficit in
shareholders' equity.
The second immaterial prior-period error being corrected relates to the
Company's previous reporting of a cumulative pricing adjustment related to
Cardizem(R) LA sold to Kos Pharmaceuticals, Inc. (Kos). This adjustment
reflected the positive impact on Biovail's supply price of price increases
implemented by Kos during the period from May 2, 2005 to September 30, 2006.
As previously disclosed, the Company recorded the entire amount of the
cumulative pricing adjustment in product sales revenue for the three months
ended September 30, 2006, as the share of that adjustment that related to any
of the prior interim periods that were affected was considered to be
immaterial. Under its revised reporting, the Company has allocated a share of
the cumulative pricing adjustment to each of the affected interim periods. As
a result, product sales revenue in the accompanying consolidated statement of
income for the three months ended March 31, 2006 has been restated upward to
account for a share of the pricing adjustment in the amount of $2.1 million
(with a corresponding increase to net income). Product sales revenue for
fiscal 2005 has been restated upward to account for a share of the pricing
adjustment in the amount of $2.8 million, while 2006 product sales revenue has
been reduced by $2.8 million. This revised reporting had no cumulative effect
on the accompanying consolidated balance sheet at December 31, 2006.
The tables below provide details of the impact of the restatement for
each of 2005 and 2006.
Impact of Restatement on 2005 Net Income and Diluted EPS ($000s, except
EPS figures)
Q1 Q2 Q3 Q4 2005
----------------------------------------------------------------------
Net Income as reported 11,132 3,707 101,663 119,719 236,221
Adjustments:
Amortization of Zovirax(R)
Asset - 242 1,598 3,361 5,201
Foreign Exchange 778 1,175 63 195 2,211
Cardizem(R) LA Price
Increases - 981 1,162 664 2,807
------------------------------------ ------ -------- -------- --------
Total Adjustments 778 2,398 2,823 4,220 10,219
------------------------------------ ------ -------- -------- --------
Restated Net Income 11,910 6,105 104,486 123,939 246,440
Diluted EPS
As reported 0.07 0.02 0.64 0.75 1.48
Restated 0.07 0.04 0.65 0.77 1.54
----------------------------------------------------------------------
Impact of Restatement on 2006 Net Income and Diluted EPS ($000s, except
EPS figures)
Q1 Q2 Q3 Q4 2006
----------------------------------------------------------------------
Net Income (Loss) as
reported 64,486 80,594 (56,451) 115,319 203,948
Adjustments:
Amortization of Zovirax(R)
Asset 2,137 3,251 3,523 3,218 12,129
Foreign Exchange (293) (905) 115 (561) (1,644)
Cardizem LA(R) Price
Increases 2,106 2,337 (7,250) - (2,807)
------- ------- -------- -------- --------
Total Adjustments 3,950 4,683 (3,612) 2,657 7,678
------- ------- -------- -------- --------
Restated Net Income (Loss) 68,436 85,277 (60,063) 117,976 211,626
Diluted EPS
As reported 0.40 0.50 (0.35) 0.72 1.27
Restated 0.43 0.53 (0.37) 0.74 1.32
----------------------------------------------------------------------
The decision to restate the company's financial statements to reflect the
matters referred to above was made by the Audit Committee of Biovail's Board
of Directors, upon the recommendation of management. The comparative 2006
figures in the financial results for the first quarter of 2007 reflect the
adjustments referred to above. Biovail expects to file an amended and restated
Form 20-F for 2006, which will include restated 2005 figures, and such other
reports as may be required, by May 25, 2007. Biovail's management is in the
process of preparing the necessary restatements. These documents will require
review and approval from the Audit Committee of the Board of Directors and the
Company's independent auditors prior to filing.
Remediation Plan
As part of the restatement process, Biovail evaluated the impact of the
accounting errors in its assessment of internal controls over financial
reporting under Section 404 of the Sarbanes-Oxley Act of 2002, as at December
31, 2006. This re-evaluation was conducted in accordance with the provisions
of PCAOB Auditing Standard No. 2.
Based on the information and facts available during the Company's
re-evaluation, Biovail concluded that the data-input errors occurring within
the tracking of quantities of Zovirax(R) product, and the calculation of
amortization of the related long-term asset, represented a material weakness.
The Company also concluded that the failure of subsequent evaluation and
analysis performed by local management to detect these errors on a timely
basis also represented a material weakness.
To address the material weaknesses identified, management is in the
process of implementing measures to remediate the control deficiency in the
location where the foregoing error in the amortization of the Zovirax(R) asset
occurred. With respect to spreadsheets, these measures include strengthening
internal controls around their development and usage, and the review and
related analysis of those spreadsheets by local management; and examining the
possibility of incorporating the automation of the spreadsheet-based data into
the Company's Enterprise Resource Planning application. Biovail anticipates
that these measures will be implemented by the end of the second quarter of
2007.
Conference Call
Biovail management will host a conference call and Webcast on Thursday,
May 10, 2007, at 8:30 a.m. EDT for Company executives to discuss 2007
first-quarter financial results. Following the discussion, Biovail executives
will address inquiries from research analysts.
A live Webcast of this call will be available through the Investor
Relations section of the Biovail Web site, at www.biovail.com. To access the
call live, please dial 416-340-8010 (Toronto and International callers) and
1-866-540-8136 (U.S. and Canada). Listeners are encouraged to dial in 10
minutes before the call begins to avoid delays.
A replay of the conference call will be available until 7 p.m. EDT on
Thursday, May 17, 2007, by dialing 416-695-5800 (Toronto and International
callers) and 1-800-408-3053 (U.S. and Canada), using access code, 3221188#.
Caution Regarding Forward-Looking Information and "Safe Harbor" Statement
Under the Private Securities Litigation Reform Act of 1995
To the extent any statements made in this release contain information
that is not historical, these statements are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and may be
forward-looking information within the meaning of the "safe harbor" provisions
of applicable Canadian provincial securities legislation (collectively,
"forward-looking statements"). These forward-looking statements relate to,
among other things, our objectives, goals, targets, strategies, intentions,
plans, beliefs, estimates, outlook and guidance, including, without
limitation, statements concerning the Company's expectations regarding the
timing of filing amended and restated financial information, expectations
regarding its pipeline and product cycle, expectations regarding regulatory
filings to the FDA and the Company's guidance for 2007 in respect of its total
revenues, EPS and cash flows from operations, and can generally be identified
by the use of words such as "guidance", "believe," "anticipate," "expect,"
"intend," "plan," "will," "may" and other similar expressions. In addition,
any statements that refer to expectations, projections or other
characterizations of future events or circumstances are forward-looking
statements.
Although Biovail believes that the expectations reflected in such
forward-looking statements are reasonable, such statements involve risks and
uncertainties, and undue reliance should not be placed on such statements.
Certain material factors or assumptions are applied in making forward-looking
statements, and actual results may differ materially from those expressed or
implied in such statements. Important factors that could cause actual results
to differ materially from these expectations include, among other things: a
decrease in sales of Wellbutrin XL(R), the difficulty of predicting U.S. Food
and Drug Administration, Canadian Therapeutic Products Directorate and
European regulatory 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 and finished products, the regulatory environment, tax rate
assumptions, the outcome of legal proceedings, fluctuations in operating
results and other risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission and the Ontario Securities
Commission, as well as the Company's ability to anticipate and manage the
risks associated with the foregoing. Additional information about these
factors and about the material factors or assumptions underlying such
forward-looking statements may be found in the body of this news release, and
the Company's news release issued March 5, 2007 entitled "Biovail Announces
Comprehensive Settlement Related to Wellbutrin XL(R)", as well as under the
heading "Risk Factors" contained in Item 3(D) of Biovail's most recent Annual
Report on Form 20-F. The Company's intention and expectation to file amended
and restated financial information by May 25, 2007 is based on management
assumptions and existing information and involves risks and uncertainties, and
the Company makes no assurances that it will do so.
The Company cautions that the foregoing list of important factors that
may affect future results is not exhaustive. When relying on Biovail's
forward-looking statements to make decisions with respect to the Company,
investors and others should carefully consider the foregoing factors and other
uncertainties and potential events. Actual restated amounts may differ
materially from those stated in this news release due to a number of factors,
including changes arising from the restatement process and the occurrence of
subsequent events. Biovail undertakes no obligation to update or revise any
forward-looking statement.
About Biovail Corporation
Biovail Corporation is a specialty pharmaceutical company, engaged in the
formulation, clinical testing, registration, manufacture and commercialization
of pharmaceutical products utilizing advanced drug-delivery technologies. For
more information about Biovail, visit the Company's Web site at
www.biovail.com.
For further information, please contact Nelson F. Isabel at 905-286-3000
or send inquiries to ir@biovail.com.
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
March 31
---------------------------
2007 2006
------------- -------------
REVENUE (As Restated)
Product sales $238,002 $211,811
Research and development 4,841 4,909
Royalty and other 4,162 5,909
------------- -------------
247,005 222,629
------------- -------------
EXPENSES
Cost of goods sold 56,416 47,192
Research and development 29,722 22,328
Selling, general and administrative 49,594 56,550
Amortization 11,981 14,824
Restructuring costs 645 -
------------- -------------
148,358 140,894
------------- -------------
Operating income 98,647 81,735
Interest income 9,761 5,196
Interest expense (8,677) (9,024)
Foreign exchange loss (288) (883)
Other expense (424) (318)
------------- -------------
Income from continuing operations before
provision
for income taxes 99,019 76,706
Provision for income taxes 5,200 4,150
------------- -------------
Income from continuing operations 93,819 72,556
Loss from discontinued operation - (4,120)
------------- -------------
Net income $93,819 $68,436
------------- -------------
Basic and diluted earnings (loss) per
share
Income from continuing operations $0.58 $0.45
Loss from discontinued operation - (0.02)
------------- -------------
Net income $0.58 $0.43
------------- -------------
Weighted average number of common shares
outstanding (000s)
Basic 160,559 159,663
------------- -------------
Diluted 160,559 159,737
------------- -------------
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
At At
March 31 December 31
2007 2006
------------ -------------
ASSETS (As Restated)
Cash and cash equivalents $870,175 $834,540
Other current assets 212,792 223,084
Long-term investments 55,227 56,442
Property, plant and equipment, net 212,988 211,979
Intangible assets, net 683,372 697,645
Goodwill 100,294 100,294
Other long-term assets 59,124 68,458
------------ -------------
$2,193,972 $2,192,442
------------ -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $742,214 $410,287
Long-term obligations 1,337 400,645
Other long-term liabilities 107,953 79,253
Shareholders' equity 1,342,468 1,302,257
------------ -------------
$2,193,972 $2,192,442
------------ -------------
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
Three Months Ended
March 31
--------------------------
2007 2006
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES (As Restated)
Net income $93,819 $68,436
Adjustments to reconcile net income to cash
provided by continuing
operating activities
Depreciation and amortization 21,885 22,978
Amortization of deferred financing costs 531 622
Amortization of discounts on long-term
obligations 201 491
Stock-based compensation 4,226 6,873
Equity loss 424 318
Loss from discontinued operation - 4,120
Other 696 308
Changes in operating assets and
liabilities (1,954) (9,454)
------------ -------------
Net cash provided by continuing operating
activities 119,828 94,692
Net cash used in continuing investing
activities (5,730) (18,212)
Net cash used in continuing financing
activities (78,494) (8,357)
Net cash used in discontinued operation - (580)
Effect of exchange rate changes on cash and
cash equivalents 31 (13)
------------ -------------
Net increase in cash and cash equivalents 35,635 67,530
Cash and cash equivalents, beginning of
period 834,540 445,289
------------ -------------
Cash and cash equivalents, end of period $870,175 $512,819
------------ -------------
For further information: Biovail Corporation Vice-President, Investor
Relations & Corporate Communications Nelson F. Isabel, 905-286-3000
ir@biovail.com
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