QUEBEC, Feb. 12 /PRNewswire-FirstCall/ - AEterna Zentaris Inc. today announced that the Company, after discussions with its external auditors relating to the Company’s and the auditors’ interpretation of Section 3465 of the Canadian Institute of Chartered Accountants (“CICA”) Handbook, has determined to restate its interim unaudited consolidated financial statements for the third quarter and nine-month period ended September 30, 2006. This non-cash restatement will reduce the Company’s future income tax expense and its net loss by $4.9 million for the third quarter and nine-month period ended September 30, 2006. AEterna Zentaris’ restated net loss will be $1.6 million for the three-month period and $5.7 million for the nine-month period ended September 30, 2006, compared to the previously reported net loss of $6.5 million and $10.6 million for such periods, respectively. The Company’s net loss per share on a basic and fully- diluted basis will be $0.03 for the three-month period and $0.11 for the nine-month period ended September 30, 2006, compared to the previously reported $0.12 and $0.21 for such periods, respectively. The impact on the consolidated balance sheet will be a decrease in the future income tax liabilities of $5 million, a decrease in the deficit of $4.9 million and an increase in the cumulative translation adjustment of $0.1 million.
Section 3465 of the CICA Handbook provides guidance related to the valuation of future income tax assets in connection with income tax losses. The valuation of the $4.9 million allowance previously recorded in the Company’s consolidated statement of operations as future income tax expense in the third quarter ended September 30, 2006 has been reversed. Furthermore, in conjunction with the aforementioned restatement, future income tax assets and liabilities arising from within the same jurisdiction have also been offset as required by Section 3465.
The Company anticipates filing the restated third quarter 2006 interim financial statements and the corresponding Management’s Discussion and Analysis (MD&A) later today. These documents will be available on www.sedar.com and on the Company’s website at www.aeternazentaris.com. A summary of certain restated financial information is attached to this press release.
About AEterna Zentaris Inc.
AEterna Zentaris Inc. is a late-stage, global biopharmaceutical company focused on endocrine therapy and oncology with proven expertise in drug discovery, development and commercialization.
News releases and additional information are available at www.aeternazentaris.com.
Forward-Looking Statements
This press release contains forward-looking statements made pursuant to the safe harbor provisions of the U.S. Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which could cause the Company’s actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, among others, the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the ability of the Company to take advantage of business opportunities in the pharmaceutical industry, uncertainties related to the regulatory process and general changes in economic conditions. Investors should consult the Company’s quarterly and annual filings with the Canadian and U.S. securities commissions for additional information on risks and uncertainties relating to the forward-looking statements. Investors are cautioned not to rely on these forward-looking statements. The Company does not undertake to update these forward-looking statements.
Attachment: Financial summary (In thousands of US dollars, except share and per share data) Quarters ended Nine months ended CONSOLIDATED RESULTS September 30, September 30, Unaudited 2006 2005 2006 2005 ------------------------------------------------------------------------ $ $ $ $ (restated) (restated) ------------------------------------------------------------------------ Revenues 83,893 52,879 251,760 174,888 ------------------------------------------------------------------------ Operating expenses Cost of sales 55,664 34,073 165,479 109,800 Selling, general and administrative 15,125 9,836 44,209 29,785 R&D costs, net of tax credits and grants 6,194 6,147 20,475 18,692 Depreciation and amortization 2,517 1,837 7,376 5,666 ------------------------------------------------------------------------ 79,500 51,893 237,539 163,943 ------------------------------------------------------------------------ Earnings from operations 4,393 986 14,221 10,945 Interest income 539 339 1,414 1,071 Interest expense (1,971) (2,241) (7,198) (7,067) Foreign exchange gain (loss) 109 (404) 26 (351) ------------------------------------------------------------------------ Earnings (loss) before the following items 3,070 (1,320) 8,463 4,598 Current income taxes (2,010) (251) (6,401) (4,503) Future income taxes 692 (753) 2,511 (1,915) Gain (loss) on dilution of investments (5) 109 (140) 16,502 Non-controlling interest (3,316) (1,544) (10,144) (5,047) ------------------------------------------------------------------------ Net earnings (loss) for the period (1,569) (3,759) (5,711) 9,635 ------------------------------------------------------------------------ Net earnings (loss) per share Basic (0.03) (0.08) (0.11) 0.21 ------------------------------------------------------------------------ Diluted (0.03) (0.08) (0.11) 0.20 ------------------------------------------------------------------------ Weighted average number of shares Basic 52,692,065 46,139,814 51,900,754 46,139,814 Diluted 53,040,488 46,397,156 52,390,209 46,459,000 Issued and outstanding shares 53,160,970 46,139,814 CONSOLIDATED BALANCE SHEET As at As at September 30,December 31, Unaudited 2006 2005 ------------------------------------------------------------------------ $ $ (restated) Cash and short-term investments 45,753 52,705 Other current assets 111,435 110,971 --------------------- 157,188 163,676 Long-term assets 268,849 256,204 --------------------- Total assets 426,037 419,880 --------------------- Current liabilities 63,450 64,174 Long-term debt 99,144 135,743 Other long-term liabilities 43,740 45,901 Non-controlling interest 77,938 64,531 --------------------- 284,272 310,349 Shareholders’ equity 141,765 109,531 --------------------- Total liabilities and shareholders’ equity 426,037 419,880 ---------------------
AETERNA ZENTARIS INC.
CONTACT: Jenene Thomas, Senior Director, Investor Relations & CorporateCommunications, (418) 655-6420, jenene.thomas@aeternazentaris.com; PaulBurroughs, Media Relations, (418) 652-8525, ext. 406,paul.burroughs@aeternazentaris.com
