Biovail Corporation (NYSE:BVF)(TSX:BVF) today announced financial
results for the three-month and six-month periods ended June 30, 2008.
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 in this news release.
“We have made progress in the implementation of our New Strategic
Focus and the transformation of Biovail,” said Biovail Chief Executive
Officer Bill Wells. “Our cost-efficiency initiatives are beginning to
produce results, our business-development efforts are extremely
active, and Biovail’s balance sheet and cash balances are robust.
Operating cash flows are also strong. Across all levels of the
organization, Biovail’s employees are eager to do their part to
implement the Company’s new strategy.”
Financial Results
Total revenues for the three months ended June 30, 2008 were
$186.1 million, compared with $203.0 million for the second quarter of
2007. Total revenues for the six months ended June 30, 2008 were
$394.6 million, compared with $450.0 million for the first six months
of 2007. Second-quarter 2008 net income, in accordance with United
States Generally Accepted Accounting Principles (GAAP), was a loss of
$25.3 million, compared with net income of $67.8 million for the
corresponding 2007 period. Net income for the first half of 2008 was
$31.1 million, compared with $161.6 million in the same period a year
earlier. On a per-share basis, Biovail recorded a GAAP diluted loss
per share of $0.16 for the second quarter of 2008, compared with
earnings per share (EPS) of $0.42 for the second quarter of 2007. In
the first half of 2008, GAAP EPS were $0.19, compared with EPS of
$1.01 for the first half of 2007.
Specific Items Affecting Operations
The following table displays specific items that affected results
in the second quarter and first half of 2008 and 2007, respectively,
and the impact of each individual item on diluted EPS.
($ in 000s, except per
share data; Income
(Expense)) Three Months Ended June 30
——————————————-
2008 2007
————————– ——————— ———————
Amount EPS Impact Amount EPS Impact
——————— ———————
Restructuring costs $(51,760) $(0.32) $(887) $(0.01)
Legal settlement (24,648) $(0.15) - $-
Management succession
costs (6,052) $(0.04) - $-
Proxy contest costs (5,414) $(0.03) - $-
Gain on disposal of
investments 3,461 $0.02 15,716 $0.10
Loss on impairment of
investments (489) $- - $-
Equity loss - $- (469) $-
Loss on early
extinguishment of debt - $- (12,463) $(0.08)
Contract recoveries - $- 1,612 $0.01
========================== ===================== =====================
Total $(84,902) (0.53) $3,509 0.02
($ in 000s, except per
share data; Income
(Expense)) Six Months Ended June 30
——————————————-
2008 2007
————————– ——————— ———————
Amount EPS Impact Amount EPS Impact
——————— ———————
Restructuring costs $(51,760) $(0.32) $(1,532) $(0.01)
Legal settlement (24,648) $(0.15) - $-
Management succession
costs (6,052) $(0.04) - $-
Proxy contest costs (5,414) $(0.03) - $-
Gain on disposal of
investments 3,461 $0.02 15,716 $0.10
Loss on impairment of
investments (4,105) $(0.03) - $-
Equity loss (1,195) $(0.01) (893) $(0.01)
Loss on early
extinguishment of debt - $- (12,463) $(0.08)
Contract recoveries - $- 1,612 $0.01
========================== ===================== =====================
Total $(89,713) (0.56) $2,440 0.02
In the second quarter of 2008, Biovail accrued a $51.8-million
charge related to the planned closure of the Company’s Puerto Rico
manufacturing facilities and the pending closure of its research and
development facility in Dublin, Ireland. In addition, Biovail incurred
a charge of $24.6 million related to an agreement-in-principle with
the U.S. Department of Justice related to their investigation into the
2003 commercial launch of Cardizem(R) LA. Biovail also incurred costs
of $6.1 million in expenses in the second quarter of 2008 related to
management succession; $5.4 million associated with the recently
resolved proxy contest regarding the election of the Board of
Directors; and a $0.5-million loss on impairment of investments,
relating primarily to the Company’s portfolio of auction rate
securities. These charges were partially offset by a $3.5-million gain
on the sale of Biovail’s investment in Financiere Verdi (formerly
Ethypharm S.A.). These specific items had an aggregate negative impact
of $84.9 million in the second quarter of 2008, or $0.53 per common
share.
In the second quarter of 2007, Biovail incurred a charge of $0.9
million associated with the December 2006 restructuring of the
Company’s U.S. commercial operations, and a loss of $12.5 million on
the extinguishment of the Company’s Senior Subordinated Notes, which
includes a $7.9-million premium for the early redemption, and the
write-off of $4.6 million in deferred financing and other associated
costs. Biovail also recorded a $0.5-million equity loss in the second
quarter of 2007 relating to the Company’s investment in Western Life
Sciences Venture Fund. Offsetting these items was a $15.7-million gain
associated with the April 2007 sale of a portion of the Company’s
investment in Ethypharm S.A., and a $1.6-million reversal in accrued
contract-cost provisions, primarily related to the Wellbutrin XL(R)
agreement as a result of additional sample purchases by
GlaxoSmithKline plc (GSK) in the second quarter of 2007. These
specific items had an aggregate positive impact to net income of $3.5
million, or $0.02 per common share.
New Strategic Focus
In May 2008, Biovail announced a New Strategic Focus - one that
leverages the Company’s existing strengths to target unmet medical
needs in the therapeutic area of specialty central nervous system
(CNS) disorders. This shift in strategy was necessary given ongoing
changes in the global pharmaceutical marketplace, including heightened
cost-containment pressures and intellectual-property regulations, and
shorter product lifecycles. Since then, the Company has made progress
in its product-procurement activities targeted towards specialty CNS
disorders, and is currently reviewing a number of in-licensing or
acquisition opportunities. Biovail is also assessing a number of
private and public pharmaceutical companies active in the specialty
CNS market for potential acquisition.
Biovail is enhancing its senior management team and internal
expertise in CNS disorders, as it implements its New Strategic Focus.
In June 2008, the Company appointed Dr. Robert Butz as Vice-President,
Medical and Scientific Affairs. Dr. Butz brings over 30 years of
experience in the pharmaceutical industry, including tenures at
Burroughs Wellcome, Quintiles Transnational, Amylin Pharmaceuticals,
Sensus Drug Development Corporation and MDS Pharma Services.
Throughout his career, Dr. Butz has been involved in the development
of over a dozen CNS programs.
Biovail is currently recruiting a Chief Scientific Officer, and
has met with a number of qualified candidates to fill the role.
Biovail is also active in its efforts to establish a Scientific
Advisory Board to provide oversight to its product-development
pipeline.
Operating-Efficiency Initiatives
Also in May, Biovail announced it was taking steps to close the
Company’s two Puerto Rico manufacturing facilities and transfer
certain manufacturing processes to its Steinbach, Manitoba facility.
These closures, which are expected to take 18 to 24 months to
complete, are intended to reduce the Company’s cost infrastructure and
increase available capital. Biovail is also planning the closure of
its research-and-development facility in Dublin, Ireland, and the
consolidation of the activities conducted therein to the Company’s R&D
site in Chantilly, Virginia. A consultation process with employees in
Ireland in respect of this closure is ongoing.
Biovail has begun the sale process relating to its Puerto Rican
facilities and will initiate similar efforts for the Company’s Irish
facility upon confirmation of its closure. The closure of these three
facilities will result in a reduction of headcount of about 300
employees - representing approximately 20% of Biovail’s total
headcount - without any anticipated impact to the Company’s existing
revenue base.
Non-Core Asset Sales
In June 2008, Biovail sold its economic interest (common shares
and convertible securities) in Financiere Verdi for proceeds of $12.2
million. Biovail is exploring the divestiture and/or monetization of
other non-core assets, including its facilities in Puerto Rico and
Ireland, which the Company believes could, in aggregate, result in
cash proceeds in excess of $100 million.
Share Repurchase Program
Under the Company’s ongoing share repurchase program, 2.3 million
shares were purchased and cancelled from June 2, 2008 to June 23, 2008
at a cost of $25.5 million. Biovail’s Board has approved the purchase
of up to 14 million shares, subject to regulatory filings and
approvals, under the program, which expires June 1, 2009. Biovail’s
credit facility currently restricts any share purchases to $50 million
per calendar year and any purchases beyond this threshold require
lender consent.
Second-Quarter 2008 Financial Performance
The following table summarizes Biovail’s product revenue
performance in the second quarter and first half of 2008:
($000s) Q2/08 Q2/07 H1/08 H1/07
Revenues Revenues Change Revenues Revenues Change
———————————————————————-
Wellbutrin XL(R) 30,420 53,048 (43%) 89,276 114,453 (22%)
Ultram(R) ER 19,166 19,562 (2%) 43,270 49,581 (13%)
Zovirax(R) 37,525 35,217 7% 74,655 72,500 3%
Biovail
Pharmaceuticals
Canada 18,413 14,071 31% 34,653 27,897 24%
Cardizem(R) LA 10,485 22,686 (54%) 20,692 46,635 (56%)
Legacy Products 40,191 34,917 15% 73,338 70,557 4%
Generics 18,937 11,265 68% 36,167 47,145 (23%)
Glumetza(R) - US 529 - N/A 529 - N/A
———————————————————————-
Total Product
Revenues 175,666 190,766 (8%) 372,580 428,768 (13%)
———————————————————————-
Product revenues for the second quarter of 2008 were $175.7
million, compared with $190.8 million in the second quarter of 2007,
an 8% decrease that primarily reflects the introduction of generic
competition for the 150mg dosage strength of Wellbutrin XL(R) and
lower revenues for Cardizem(R) LA. Partially offsetting these declines
were increases in revenues from the Company’s portfolio of generic
products, Legacy products, Biovail Pharmaceuticals Canada (BPC) and,
Zovirax(R). Product revenues for the six months ended June 30, 2008
were $372.6 million compared with $428.8 million for the six months
ended June 30, 2007.
Product revenues for Wellbutrin XL(R) were $30.4 million in the
second quarter of 2008, and $89.3 million in the first half of 2008,
compared with $53.0 million and $114.5 million in corresponding
periods in 2007, respectively. These decreases reflect the December
2006 and May 2008 introduction of generic competition for the 300mg
and 150mg dosage strengths, respectively, of the product.
Biovail recorded revenues of $19.2 million for Ultram(R) ER in the
second quarter of 2008, compared with $19.6 million in the
corresponding period in 2007. In the first half of 2008, Ultram(R) ER
generated revenues of $43.3 million, compared to $49.6 million in the
corresponding period in 2008. Year-over-year performance reflects a
reduction in inventory levels and the timing of sample shipments,
partially offset by a price increase in the first quarter of 2008. In
the second quarter of 2008, Ultram(R) ER captured 5.6% of total
prescription volume of the tramadol market (including generics).
Revenues for Biovail’s Zovirax(R) franchise were $37.5 million in
the second quarter of 2008, and $74.7 million in the first half of
2008, representing increases of 7% and 3%, respectively, when compared
with $35.2 million and $72.5 million in the prior-year periods. The
increases reflect the timing of wholesaler inventory purchases and a
January 2008 price increase. In the second quarter of 2008, Zovirax(R)
Ointment and Zovirax(R) Cream held a combined 75.1% share of the
topical herpes market.
Second-quarter 2008 revenues for BPC were $18.4 million, compared
with $14.1 million in the prior-year period. First-half 2008 revenues
for BPC were $34.7 million, compared with $27.9 million in the first
half of 2007. The increases reflect higher sales of Wellbutrin(R) XL,
Tiazac(R) XC, Glumetza(R) and Ralivia(TM) which was launched in
November 2007. Wellbutrin(R) XL continues to gain market share,
capturing 46% of total prescriptions written for the Wellbutrin(R)
brand in the second quarter of 2008. Tiazac(R) XC continues to gain
market share, capturing 39% of total prescriptions written for the
Tiazac(R) brand in the second quarter of 2008. Partially offsetting
factors were lower sales of Tiazac(R), Zyban(R) and Wellbutrin(R) SR.
In the second quarter of 2008, Cardizem(R) LA generated revenues
of $10.5 million, compared with $22.7 million for the corresponding
period in 2007. In the first half of 2008, Cardizem(R) LA generated
revenues of $20.7 million, compared with $46.6 million in the first
half of 2007. The decreases in sales for the three and six months
ended June 2008 reflects lower prescription volumes for the product,
partially offset by price increases. In addition, sales were unusually
high in the first six months of 2007 due to the fulfillment of
backorders for the 120mg and 180mg strength tablets of the product in
the first quarter of 2007.
Legacy products generated revenues of $40.2 million in the second
quarter of 2008 and $73.3 million in the first half of 2008, compared
with $34.9 million and $70.6 million in the corresponding periods in
2007, respectively. This performance primarily reflects the impact of
price increases, partially offset by lower prescription volumes.
Product revenue for Biovail’s portfolio of generic products,
distributed by Teva Pharmaceutical Industries Ltd. (Teva), was $18.9
million in the second quarter of 2008, compared with $11.3 million in
the second quarter of 2007, which was impacted by a
higher-than-expected level of charge-backs processed by Teva. In the
first half of 2008, Biovail’s generic products generated revenues of
$36.2 million, compared with $47.1 million in the first half of 2007,
reflecting lower sales of Biovail’s generic formulations of Adalat CC
and Procardia XL.
Research-and-development revenue was $5.7 million in the second
quarter of 2008, compared with $7.4 million in the prior-year period,
a decrease of 23% that reflects a $1.9-million payment from Kos in the
second quarter of 2007 related to development activity for
Vasocard(TM) prior to the project’s termination. Revenues for the
first half of 2008 increased 7% compared with the corresponding period
of 2007, which reflects increased activity levels at Biovail’s
Contract Research Division.
Royalty and other revenue was $4.7 million in the second quarter
of 2008 and $9.0 million in the first half of 2008, compared with $4.9
million and $9.0 million in the corresponding periods in 2007,
respectively.
Cost of goods sold for the second quarter of 2008 was $43.9
million, compared with $54.5 million in the second quarter of 2007.
Gross margins based on product sales were 75.0% and 73.8% in the
second quarter and first half of 2008, respectively, compared with
71.4% and 74.1% in the corresponding 2007 periods. Gross margins in
the second quarter of 2008 were positively impacted by price increases
and a reduction in inventory reserves. In the second quarter of 2007,
gross margins were negatively impacted by a higher-than-expected level
of charge-backs processed by Teva (described above).
Research-and-development expenditures were $21.8 million for the
second quarter of 2008 and $58.1 million for the first half of 2008,
compared with $28.4 million and $58.2 million for the corresponding
periods in 2007, respectively. The year-over-year changes reflect
decreased spending for BVF-146 (tramadol/NSAID combination), which was
recently discontinued, and Aplenzin(TM) (bupropion salt), which
received FDA approval in April 2008. Biovail is in active discussions
with potential partners for the commercialization of Aplenzin(TM) in
the United States. The Company is also evaluating other
commercialization options for the product, including co-promotion
opportunities and the use of a contract sales organization.
Selling, general and administrative (SG&A) expenses for the second
quarter of 2008 were $56.6 million, compared with $46.3 million in the
second quarter of 2007. SG&A expenses for the first half of 2008 were
$100.2 million, compared with $95.9 million in the corresponding
period in 2007. These increases reflect expenses of $5.4 million
associated with the recent proxy contest and $6.1 million in expenses
related to management succession, which includes $2.1 million in
non-cash expenses associated with the accounting for stock-based
compensation. Also contributing to the increase were higher payments
to Sciele Pharma, Inc. ($5.5 million in the second quarter of 2008,
compared with $3.7 million in the prior-year period), related to their
promotional efforts for Zovirax(R) and an increase in advertising and
promotional expenses ($5.6 million in the second quarter of 2008,
compared with $3.2 million in the prior-year period), primarily
related to the launch of Ralivia(TM) in Canada. Partially offsetting
factors include lower legal costs, which totaled $9.1 million in the
second quarter of 2008, compared with $13.9 million in the prior-year
period.
Amortization expense was $11.7 million in the second quarter of
2008 and $23.4 million in the first half of 2008, compared with $12.0
million and $24.0 million in the second quarter and first half of
2007, respectively.
Balance Sheet & Cash Flow
At June 30, 2008, Biovail had cash balances of $354.1 million and
marketable securities of $23.1 million. The Company has no long-term
debt and no outstanding borrowings against its $250-million credit
facility.
Biovail currently has $26.8 million of principal invested in
auction-rate securities (ARS), all of which were rated Aaa/AAA at the
time of purchase. However, given declines in underlying collateral
values, several of these holdings have had their ratings downgraded
since the fourth quarter of 2007. Although these securities continue
to pay cash interest, Biovail has been unable to liquidate its ARS
portfolio. As such, the Company has recorded this portfolio at its
estimated fair value of $13.5 million as at June 30, 2008 and has
recorded a further impairment charge of $0.3 million in the second
quarter of 2008. To date, the Company has recorded cumulative
impairment charges of $9.2 million in respect of these securities. In
addition, the Company has recorded a cumulative amount of $4.1 million
as an unrealized loss in other comprehensive income.
Cash flow from operations was $67.1 million in the second quarter
of 2008, compared with $98.3 million in the second quarter of 2007,
which reflects changes in working capital, increased costs related to
the proxy contest and management succession and a modest decline in
gross profit due primarily to the genericization of the 150mg strength
of Wellbutrin XL(R) product in May 2008. Net capital expenditures in
the second quarter of 2008 amounted to $7.7 million, compared with
$7.4 million in the prior-year period. Capital expenditures are
expected to decrease going forward, with the closure of the Company’s
Puerto Rico manufacturing facilities.
Outlook
Biovail is making progress in the implementation of its New
Strategic Focus. Over the next several quarters, the Company’s ongoing
and planned efficiency initiatives are expected to result in
additional charges to earnings. Cumulatively, these charges, including
those recorded in the second quarter of 2008, are expected to be in
the range of $80 million to $100 million, of which the cash component
is expected to be $30 million to $40 million. Cost-efficiency
initiatives, which should gradually lower expenses, include the
previously disclosed closure of the Company’s two manufacturing
facilities in Puerto Rico and the potential closure of our
research-and-development site in Dublin, Ireland. In addition, the
Company’s recent resolution of several legacy litigation matters
should also contribute to lower overall expenses. Biovail anticipates
total annual savings of $30 million to $40 million once all
initiatives are completed.
Biovail expects year-over-year decreases in its product sales for
the next several quarters, mainly as a result of the second-quarter
2008 introduction of generic competition on the 150mg strength of
Wellbutrin XL(R). Biovail does not anticipate meaningful revenue
contribution from its development pipeline until the 2010-2011
timeframe.
Biovail plans to invest over $600 million in research and
development through 2012, targeting unmet medical needs in specialty
CNS markets. Business-development efforts to in-license or acquire
products targeting specialty CNS markets are active with a number of
U.S. and international companies.
Conference Call
Biovail management will host a conference call and Webcast on
Wednesday, August 13, 2008, at 8:30a.m. EDT, for Company executives to
discuss second-quarter 2008 financial and operational 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 Biovail’s Web site at www.biovail.com. To access
the call live, please dial 416-695-6617 (Toronto and International
callers) and 1-800-952-6845 (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 Wednesday, August 20, 2008, by dialing 416-695-5800 (Toronto and
International callers) and 1-800-408-3053 (U.S. and Canada), using
access code, 3266755#.
Caution Regarding Forward-Looking Information and “Safe Harbor”
Statement
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 under 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 and outlook, including, without limitation, statements
concerning the Company’s New Strategic Focus, including the Company’s
intention and ability to implement and effectively execute elements of
its New Strategic Focus and the anticipated impact of the Company’s
New Strategic Focus, the intent, timing and associated costs of the
proposed closure of the Company’s Puerto Rico and Ireland facilities
and other efficiency initiatives, the Company’s intent and ability to
make purchases under its share repurchase program, the outcome of
business development efforts, the expected impact of the introduction
of generic competition on the 150mg strength of Wellbutrin XL(R), the
amount and timing of expected contribution from the Company’s
development pipeline and the amount and timing of investment in
research and development and can generally be identified by the use of
words such as “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, including, but not limited to,
factors and assumptions regarding prescription trends, pricing and the
formulary and/or Medicare/Medicaid positioning for our products, the
competitive landscape in the markets in which we compete, including,
but not limited to, the availability or introduction of generic
formulations of our products, timelines associated with the
development of, and receipt of regulatory approval for, our new
products, 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: the difficulty of predicting U.S. Food
and Drug Administration and Canadian Therapeutic Products Directorate
approvals, acceptance and demand for new pharmaceutical products, the
impact of competitive products and pricing, uncertainties associated
with the development, acquisition and launch of new products, reliance
on key strategic alliances, contractual disagreements with third
parties, availability of raw materials and finished products, the
regulatory environment, the expense, timing and uncertain outcome of
legal and regulatory proceedings and settlements thereto, market
liquidity for our common shares and our satisfaction of applicable
laws for the repurchase of our common shares, the results of the
upcoming U.S. presidential election, consolidated tax rate
assumptions, 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 Canadian Securities
Administrators, 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, as well as under the heading “Risk Factors”
contained in Item 3(D) of Biovail’s most recent Annual Report on Form
20-F/A.
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.
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. The Company is focused
on the development and commercialization of medicines that address
unmet medical needs in niche specialty central nervous system (CNS)
markets. 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 (LOSS)
(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
—————— —————–
2008 2007 2008 2007
——— ——– ——– ——–
REVENUE
Product sales $175,666 $190,766 $372,580 $428,768
Research and development 5,704 7,378 13,057 12,219
Royalty and other 4,725 4,883 8,956 9,045
——— ——– ——– ——–
186,095 203,027 394,593 450,032
——— ——– ——– ——–
EXPENSES
Cost of goods sold (exclusive of
amortization shown 43,877 54,534 97,612 110,950
separately below)
Research and development 21,759 28,447 58,091 58,169
Selling, general and
administrative 56,633 46,329 100,230 95,923
Amortization 11,691 11,982 23,385 23,963
Restructuring costs 51,760 887 51,760 1,532
Legal settlement 24,648 - 24,648 -
Contract recoveries - (1,612) - (1,612)
——— ——– ——– ——–
210,368 140,567 355,726 288,925
——— ——– ——– ——–
Operating income (loss) (24,273) 62,460 38,867 161,107
Interest income 3,412 6,070 6,880 15,831
Interest expense (236) (453) (478) (9,130)
Foreign exchange gain (loss) (1,564) 763 (1,343) 475
Equity loss - (469) (1,195) (893)
Gain on disposal of investments 3,461 15,716 3,461 15,716
Loss on impairment of investments (489) - (4,105) -
Loss on early extinguishment of
debt - (12,463) - (12,463)
——— ——– ——– ——–
Income (loss) before provision
for income taxes (19,689) 71,624 42,087 170,643
Provision for income taxes 5,600 3,800 11,000 9,000
——— ——– ——– ——–
Net income (loss) $(25,289) $67,824 $31,087 $161,643
========= ======== ======== ========
Basic and diluted earnings (loss)
per share $(0.16) $0.42 $0.19 $1.01
========= ======== ======== ========
Weighted average number of common
shares outstanding (000s)
Basic 160,709 160,847 160,866 160,654
========= ======== ======== ========
Diluted 160,709 160,988 160,866 160,724
========= ======== ======== ========
Cash dividends declared per share $0.375 $0.375 $0.750 $0.750
========= ======== ======== ======== BIOVAIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
At At
June 30 December 31
2008 2007
———- ————
ASSETS
Cash and cash equivalents $354,056 $433,641
Other current assets 310,000 273,376
———- ————
664,056 707,017
Marketable securities 23,065 24,417
Long-term investments 14,609 24,834
Property, plant and equipment, net 182,298 238,457
Intangible assets, net 602,542 630,514
Goodwill 100,294 100,294
Deferred tax assets, net of valuation allowance 18,200 20,700
Other long-term assets, net 34,541 35,882
———- ————
$1,639,605 $1,782,115
========== ============
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities $350,975 $367,578
Long-term liabilities 105,475 116,718
Shareholders’ equity 1,183,155 1,297,819
———- ————
$1,639,605 $1,782,115
========== ============ BIOVAIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
——————- ——————-
2008 2007 2008 2007
——— ——— ——— ———
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income (loss) $(25,289) $67,824 $31,087 $161,643
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and
amortization 25,345 24,376 50,418 46,261
Amortization and write-down
of deferred financing costs 130 4,043 260 4,574
Amortization and write-down
of discounts on long-term
obligations - 761 - 962
Accrued legal settlements 24,648 - 14,648 -
Stock-based compensation 3,744 2,811 5,173 7,037
Gain on disposal of
investment (3,461) (15,716) (3,461) (15,716)
Impairment charges 51,974 - 55,590 -
Equity loss - 469 1,195 893
Premium paid on early
extinguishment of debt - 7,854 - 7,854
Contract recoveries - (1,612) - (1,612)
Other (1,621) 383 (1,053) 1,079
Changes in operating assets
and liabilities (8,414) 7,084 5,875 5,130
——— ——— ——— ———
Net cash provided by operating
activities 67,056 98,277 159,732 218,105
Net cash provided by (used in)
investing activities 1,796 30,402 (92,483) 24,672
Net cash used in financing
activities (146,320) (529,837) (146,458) (608,331)
Effect of exchange rate changes
on cash and cash equivalents (13) 441 (376) 472
——— ——— ——— ———
Net decrease in cash and cash
equivalents (77,481) (400,717) (79,585) (365,082)
Cash and cash equivalents,
beginning of period 431,537 870,175 433,641 834,540
——— ——— ——— ———
Cash and cash equivalents, end
of period $354,056 $469,458 $354,056 $469,458
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*T