Medicure Reports Financial Results for Quarter and Year Ended December 31, 2017
Medicure Reports Financial Results for Quarter and Year Ended December 31, 2017
WINNIPEG, May 1, 2018 /PRNewswire/ - Medicure Inc. ("Medicure" or the "Company") (TSXV:MPH, OTC:MCUJF), a cardiovascular pharmaceutical company, today reported its results from operations for the quarter and year ended December 31, 2017.
Year Ended December 31, 2017 Highlights:
-- Recorded net revenue from the sale of AGGRASTAT(®) (tirofiban
hydrochloride) of $27.1 million during the year ended December 31, 2017
compared to $29.3 million for the year ended December 31, 2016;
-- Adjusted earnings before interest, taxes, depreciation and amortization
(EBITDA)(1) for the year ended December 31, 2017 was $4.6 million
compared to adjusted EBITDA of $8.2 million for the year ended December
31, 2016; and
-- Net income for the year ended December 31, 2017 was $43.4 million, which
includes the gain on the sale of the Apicore business which occurred in
October 2017, compared to net income of $27.0 million for the year ended
December 31, 2016.
Financial Results
Net revenues from AGGRASTAT(®) for the year ended December 31, 2017 were $27.1 million compared to $29.3 million for the year ended December 31, 2016.
Net revenues for the three months ended December 31, 2017 were $5.0 million compared to $7.3 million for the three months ended December 31, 2016.
The Company recorded a restatement to its 2016 revenues, adjusted EBITDA and net income reducing those amounts by $674,833 and increasing accounts payable and accrued liabilities by the corresponding amount pertaining to an additional accrual for product discounts required at December 31, 2016.
The Company continues to experience an increase in patient market share held by the product and an increase in the number of new hospital customers using AGGRASTAT(®) leading to the highest hospital demand for AGGRASTAT(®) in the Company's history. Although, there was an increase in use of AGGRASTAT(®), the lower net income was largely due to a stronger Canadian dollar compared to its US counterpart and increased competitive pricing of generic Integrilin.
Medicure continues to focus on expanding the customer base for AGGRASTAT(®) and diversification of revenues with the acquisition of additional cardiovascular drugs for the US market, such as the recently launched ZYPITAMAG(TM) (pitavastatin).
Adjusted EBITDA for the year ended December 31, 2017 was $4.6 million compared to $8.2 million for the year ended December 31, 2016. The decrease in adjusted EBITDA for the year is the result of the lower revenues which were due primarily to lower discounted prices for AGGRASTAT(®) and a higher Canadian dollar. Adjusted EBITDA for the three months ended December 31, 2017 was negative $0.6 million compared to $0.8 million for the three months ended December 31, 2016.
Net income for the year ended December 31, 2017 was $43.4 million or $2.78 per share which includes income of $11.5 million or $0.74 per share from continuing operations and income from discontinued operations of $31.9 million or $2.04 per share, which includes the operations of Apicore and the gain on the sale of the Apicore business. This compares to net income of $27.0 million or $1.80 per share for the year ended December 31, 2016.
Net income for the three months ended December 31, 2017 was $51.5 million or $3.27 per share primarily relating to the gain on the sale of the Apicore business compared to net income of $23.8 million or $1.53 per share for the three months ended December 31, 2016.
At December 31, 2017, the Company had unrestricted cash totaling $5.3 million compared to $12.3 million as of December 31, 2016. The decrease in cash is due to higher interest payments made during the year relating to the debt obtained in November 2016 and the acquisition of additional common shares of Apicore during the period, as well as the repayment of the Company's long-term debt from the proceeds of the sale of the Apicore business. Cash from operating activities of approximately $21.9 million for the year ended December 31, 2017 resulted from increased accounts payable and accrued liabilities at December 31, 2017, which were settled subsequent to year end.
All amounts referenced herein are in Canadian dollars unless otherwise noted.
Notes
((1)) The Company defines EBITDA as "earnings before interest, taxes, depreciation, amortization and other income or expense" and Adjusted EBITDA as "EBITDA adjusted for non-cash and one-time items". The terms "EBITDA" and "Adjusted EBITDA", as it relates to the quarters and years ended December 31, 2017 and 2016 results prepared using International Financial Reporting Standards ("IFRS"), do not have any standardized meaning according to IFRS. It is therefore unlikely to be comparable to similar measures presented by other companies.
Conference Call Info:
Topic: Medicure's Fiscal Year End 2017 Results
Call date: Wednesday, May 2, 2018
Time: 7:00 AM Central Time (8:00 AM Eastern Time)
Canada toll-free: 1 (888) 465-5079 Canada toll: 1 (416) 216-4169
United States toll-free: 1 (888) 545-0687
Passcode: 6477570#
Webcast: This conference call will be webcast live over the internet and can be accessed from the Medicure investor relations page at the following link: http://www.medicure.com/investors.html
You may request international country-specific access information by e-mailing the Company in advance. Management will accept and answer questions related to the financial results and operations during the question-and-answer period at the end of the conference call. A recording of the call will be available following the event at the Company's website.
About Medicure
Medicure is a pharmaceutical company focused on the development and commercialization of therapeutics for the U.S. cardiovascular market. The primary focus of the Company is the marketing and distribution of AGGRASTAT(®) (tirofiban hydrochloride) injection and ZYPITAMAG(TM) (pitavastatin) tablets in the United States, where they are sold through the Company's U.S. subsidiary, Medicure Pharma, Inc. For more information on Medicure please visit www.medicure.com.
To be added to Medicure's e-mail list, please visit:
http://medicure.mediaroom.com/alerts
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Information: Statements contained in this press release that are not statements of historical fact, including, without limitation, statements containing the words "believes", "may", "plans", "will", "estimates", "continues", "anticipates", "intends", "expects" and similar expressions, may constitute "forward-looking information" within the meaning of applicable Canadian and U.S. federal securities laws (such forward-looking information and forward-looking statements are hereinafter collectively referred to as "forward-looking statements"). Forward-looking statements, include the target launch date for new products, estimates, analysis and opinions of management of the Company made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors which the Company believes to be relevant and reasonable in the circumstances. Inherent in forward-looking statements are known and unknown risks, uncertainties and other factors beyond the Company's ability to predict or control that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements, and as such, readers are cautioned not to place undue reliance on forward-looking statements. Such risk factors include, among others, the Company's future product revenues, stage of development, additional capital requirements, risks associated with the completion and timing of clinical trials and obtaining regulatory approval to market the Company's products, the ability to protect its intellectual property, dependence upon collaborative partners, changes in government regulation or regulatory approval processes, and rapid technological change in the industry. Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about: general business and economic conditions; the impact of changes in Canadian-US dollar and other foreign exchange rates on the Company's revenues, costs and results; the timing of the receipt of regulatory and governmental approvals for the Company's research and development projects; the availability of financing for the Company's commercial operations and/or research and development projects, or the availability of financing on reasonable terms; results of current and future clinical trials; the uncertainties associated with the acceptance and demand for new products and market competition. The foregoing list of important factors and assumptions is not exhaustive. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of factors, other than as may be required by applicable legislation. Additional discussion regarding the risks and uncertainties relating to the Company and its business can be found in the Company's other filings with the applicable Canadian securities regulatory authorities or the US Securities and Exchange Commission, and in the "Risk Factors" section of its Form 20F for the year ended December 31, 2016.
AGGRASTAT® (tirofiban hydrochloride) is a registered trademark of Medicure International Inc.
Consolidated Statements of Financial Position
(expressed in Canadian dollars)
==============================
As at December 31 2017 2016 - Restated
----------------- ---- ---------------
Assets
Current assets:
Cash and cash equivalents $5,260,480 $12,266,177
Cash held in escrow - 12,809,072
Accounts receivable 8,588,255 17,200,778
Consideration receivable 82,678,366 -
Inventories 3,075,006 12,176,644
Prepaid expenses 903,914 759,077
Assets held for sale 14,052,861 -
-------------------- ---------- ---
Total current assets 114,558,882 55,211,748
-------------------- ----------- ----------
Non?current assets:
Property, plant and equipment 221,622 10,300,639
Goodwill - 47,485,572
Intangible assets 1,756,300 100,864,817
Other assets - 161,891
Holdback receivable 12,068,773 -
Deferred tax assets 326,108 701,000
------------------- ------- -------
Total non?current assets 14,372,803 159,513,919
------------------------ ---------- -----------
Total assets $128,931,685 $214,725,667
============ ============ ============
Liabilities and Equity
Current liabilities:
Short-term borrowings $ - $1,383,864
Accounts payable and accrued liabilities 10,371,103 17,917,199
Accrued transaction costs 22,360,730 -
Current income taxes payable 2,428,560 504,586
Current portion of royalty obligation 1,537,202 2,019,243
Deferred revenue - 1,161,608
Current portion of finance lease obligations - 89,241
Current portion of long?term debt - 2,883,752
Derivative option on Apicore Class C shares - 32,901,006
Liability to repurchase Apicore Class E
shares - 2,700,101
Liabilities held for sale 6,976,313 -
------------------------- --------- ---
Total current liabilities 43,673,908 61,560,600
------------------------- ---------- ----------
Non?current liabilities
Royalty obligation 2,911,810 3,666,479
License fee payable 501,800 -
Long?term debt - 68,180,424
Finance lease obligations - 242,449
Due to vendor - 2,759,507
Fair value of Apicore Series A-1 preferred
shares - 1,755,530
Other long?term liabilities 1,135,007 133,999
Deferred tax liability - 38,142,775
---------------------- --- ----------
Total non?current liabilities 4,548,617 114,881,163
----------------------------- --------- -----------
Total liabilities 48,222,525 176,441,763
----------------- ---------- -----------
Equity:
Share capital 125,733,727 124,700,345
Warrants 1,948,805 2,020,152
Contributed surplus 6,897,266 6,756,201
Accumulated other comprehensive income 673,264 681,992
Deficit (54,543,902) (97,964,786)
------- ----------- -----------
Total equity attributable
to shareholders of the
Company 80,709,160 36,193,904
Non-controlling interest - 2,090,000
------------------------ --- ---------
Total equity 80,709,160 38,283,904
------------ ---------- ----------
Total liabilities and
equity $128,931,685 $214,725,667
===================== ============ ============
Consolidated Statements of Net Income and Comprehensive Income
(expressed in Canadian dollars)
==============================
For the year ended December 31 2017 2016 - 2015
Restated
--- --------
Revenue, net
AGGRASTAT(R) $27,132,832 $29,304,800 $22,083,128
Cost of goods sold 3,464,686 3,721,191 2,259,867
------------------ --------- --------- ---------
Gross profit 23,668,146 25,583,609 19,823,261
------------ ---------- ---------- ----------
Expenses
Selling, general and administrative 14,867,635 15,417,604 10,237,116
Research and development 5,148,233 3,630,079 4,865,255
------------------------ --------- --------- ---------
20,015,868 19,047,683 15,102,371
---------- ---------- ----------
Income before the undernoted 3,652,278 6,535,926 4,720,890
---------------------------- --------- --------- ---------
Other (income) expense:
Revaluation of holdback receivable (82,489) - -
Revaluation of long?term derivative - - (33,080)
Impairment loss (reversal of impairment loss) 635,721 - (788,305)
Loss on settlement of debt - - 60,595
-------------------------- --- --- ------
553,232 - (760,790)
Finance costs (income):
Finance expense, net 837,461 2,478,914 4,123,452
Foreign exchange (gain) loss, net (175,459) 262,469 68,799
--------------------------------- -------- ------- ------
662,002 2,741,383 4,192,251
------- --------- ---------
Net income before income taxes $2,437,044 $3,794,543 $1,289,429
Income taxes recovery (expense)
Current 9,392,836 (501,315) -
Deferred (333,187) 331,095 379,000
-------- -------- ------- -------
Net income before discontinued operations $11,496,693 $3,624,323 $1,668,429
Net income from discontinued operations, net of tax 31,924,191 23,358,318 -
--------------------------------------------------- ---------- ---------- ---
Net income $43,420,884 $26,982,641 $1,668,429
Translation adjustment, attributable to:
Continuing operations (30,295) (400,829) 806,059
Discontinued operations 21,567 (21,567) -
----------------------- ------ ------- ---
Comprehensive income $43,412,156 $26,560,245 $2,474,488
==================== =========== =========== ==========
Earnings per share from continuing operations
Basic $0.74 $0.24 $0.12
Diluted $0.63 $0.21 $0.11
======= ===== ===== =====
Earnings per share from discontinued operations
Basic $2.04 $1.56 $ -
Diluted $1.76 $1.35 $ -
======= ===== ===== === ===
Earnings per share
Basic $2.78 $1.80 $0.12
Diluted $2.39 $1.56 $0.11
======= ===== ===== =====
Consolidated Statements of Cash Flows
(expressed in Canadian dollars)
==============================
For the year ended December 31 2017 2016 - 2015
Restated
--- --------
Cash (used in) provided by:
Operating activities:
Net income from continuing operations for the
year $11,496,693 $3,624,323 $1,668,429
Net income from discontinued operations for
the year 31,924,191 23,358,318 -
---------- ---------- ---
43,420,884 26,982,641 1,668,426
Adjustments for:
Gain on sale of Apicore (55,254,236) - -
Current income tax (recovery) expense (9,392,836) 504,586 -
Deferred income tax (recovery) expense (1,513,868) 301,512 (379,000)
Impairment loss (reversal of impairment loss) 635,721 - (788,305)
Revaluation of holdback receivable (82,489) - -
Revaluation of long-term derivative - (20,560,440) (33,080)
Gain on step acquisition - (4,895,573) -
Loss on settlement of debt - - 60,595
Amortization of property, plant and equipment 1,173,019 189,008 31,544
Amortization of intangible assets 6,633,957 2,192,024 659,390
Share?based compensation 623,115 1,400,241 1,460,316
Write-down (write-up) of inventories 385,289 (108,817) 40,920
Finance expense, net 837,461 3,416,678 4,123,452
Difference between fair value of other long-term
liability and funding received - - 47,222
Unrealized foreign exchange loss 270,663 215,386 111,817
Change in the following:
Accounts receivable (3,713,375) (4,174,691) (8,185,940)
Inventories 145,339 2,520,499 (1,230,619)
Prepaid expenses 76,724 1,706,109 (1,124,095)
Other Assets 33,130 (1,229) -
Accounts payable and accrued liabilities 48,398,200 143,257 4,637,217
Deferred revenue (621,455) (382,727) -
Other long-term liabilities 77,467 (102,828) -
Interest paid (7,485,956) (1,223,664) (314,300)
Income taxes paid (894,327) - -
Royalties paid (1,829,295) (1,712,390) (642,768)
-------------- ---------- ---------- --------
Cash flows from operating activities 21,923,132 6,409,582 142,795
------------------------------------ ---------- --------- -------
Investing activities:
Proceeds from Apicore Sale Transaction 89,719,599 - -
Acquisition of Class C common shares of
Apicore (31,606,865) - -
Acquisition of Class E common shares of
Apicore (2,640,725) - -
Acquisition of Apicore, net of cash acquired - (41,711,546) -
Acquisition of property, plant and equipment (1,194,703) (464,208) (226,570)
Acquisition of intangible assets (127,144) - -
-------------------------------- -------- --- ---
Cash flows from (used in) investing activities 54,150,162 (42,175,754) (226,570)
---------------------------------------------- ---------- ----------- --------
For the year ended December 31 2016 - 2015
Restated
2017
--- ----
Financing activities:
Issuance of common shares, net of share issue
costs - - 3,630,324
Proceeds from exercise of stock options 519,999 1,844,130 33,165
Proceeds from exercise of Apicore stock
options 421,942 - -
Proceeds from exercise of warrants 92,332 39,172 150,245
Issuance of long-term debt - 56,781,184 -
Repayment of long-term debt (75,180,908) (1,666,666) (694,444)
Repayment of note payable to Apicore (18,507,400) - -
Increase in short-term borrowings 161,923 332,555 -
Decrease (increase) in cash held in escrow 12,809,072 (12,809,072) -
Finance lease payments (101,946) (10,463) -
Payment of due to vendor (3,185,945) - -
------------------------ ---------- --- ---
Cash flows (used in) from financing activities (82,970,931) 44,510,840 3,119,290
---------------------------------------------- ----------- ---------- ---------
Foreign exchange (loss) gain on cash held in foreign
currency (108,060) (47,083) 39,208
-------- -------- ------- ------
Increase (decrease) in cash (7,005,697) 8,697,585 3,074,723
Cash and cash equivalents, beginning of period 12,266,177 3,568,592 493,869
---------------------------------------------- ---------- --------- -------
Cash and cash equivalents, end of period $5,260,480 $12,266,177 $3,568,592
======================================== ========== =========== ==========
James Kinley, Chief Financial Officer, Tel. 888-435-2220, Fax 204-488-9823, E-mail: info@medicure.com, www.medicure.com
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SOURCE Medicure Inc.
