MONTREAL, CANADA--(Marketwire - November 04, 2010) - Paladin Labs Inc. (TSX: PLB), a leading Canadian specialty pharmaceutical company, today reported its third quarter 2010 financial results.
2010 Third Quarter Highlights
-- Revenues reached $31.8 million an increase of 12% over the same period
last year
-- EBITDA (1) reached a record $15.9 million an increase of 56% over the
same period last year
Subsequent to the third quarter
-- Paladin expanded its commercial relationship with Labopharm (TSX: DDS;
NASDAQ: DDSS) to distribute two of Labopharm's products in South Africa
and Sub-Saharan Africa.
-- Paladin amended its existing distribution agreement with Mission
Pharmacal to include South Africa and Sub-Saharan Africa.
"The third quarter boasts strong revenues, favourable operating leverage and record EBITDA (1). With the continued success of our key promoted products, we are well on our way to achieving our 15th consecutive year of record revenues," said Jonathan Ross Goodman, President and CEO of Paladin Labs.
Financial Results
Revenue for the third quarter 2010 increased $3.4 million or 12% to $31.8 million compared to $28.4 million for the third quarter 2009. The increase in revenues is mostly attributable to the sales growth of certain significant promoted products, including Tridural®, Trelstar®, Testim®, Metadol® and Plan B®, which combined increased by 25% for the quarter.
EBITDA (1) for the third quarter 2010 increased 56% to a record $15.9 million, compared to EBITDA1 of $10.2 million in the third quarter of 2009. For the nine months ended September 30, 2010, EBITDA1 increased 39% to $41.1 million from $29.5 million for the nine months ended September 30, 2009. Paladin's share of income from Pharmaplan was $291,000 for the quarter and $757,000 for the nine months ending September 30, 2010.
Net income for the third quarter 2010 was $8 million or $0.41 per fully diluted share, compared to net income of $2.6 million or $0.13 per fully diluted share for the same period one year ago. For the nine-month period ended September 30, 2010, net income before extraordinary gain was $15.7 million or $0.81 per fully diluted share versus net income before extraordinary gain of $7.4 million or $0.44 per fully diluted share for the nine-month period ended September 30, 2009. Net income for the nine months ended September 30, 2009 was $33.3 million or $1.98 per fully diluted share.
At September 30, 2010, Paladin's cash, cash equivalents and investments in marketable securities totalled $127.4 million. From this strong cash position, Paladin continues to pursue product acquisition and development opportunities.
Corporate Developments
In September 2010, Paladin expanded its commercial relationship with Labopharm (TSX: DDS; NASDAQ: DDSS) through three licensing and distribution agreements. In the first agreement, Labopharm granted Paladin the exclusive right (subject to Labopharm's co-promote right for Canada) to market and sell its INTELLITAB™-based twice-daily formulation of oxycodone-acetaminophen in Canada. In the second and third agreements, Labopharm granted Paladin the exclusive right to market and sell its INTELLITAB™-based oxycodone-acetaminophen and twice-daily tramadol-acetaminophen in South Africa and Sub-Saharan Africa. As part of the agreements, Paladin advanced Labopharm $10 million against future product supply of Tridural® (once-daily tramadol in Canada) to Paladin for distribution in Canada. Labopharm will repay the cash advance through partial credits against future product supplied to Paladin.
In October 2010, Paladin and Mission Pharmacal Company amended their distribution agreement for Urocit-K®. The terms of the original agreement granted Paladin exclusive rights for the sales and marketing of Urocit-K® in Canada. Under the terms of the new agreement, the territory covered is extended to include exclusive rights for sales and marketing in South Africa and Sub-Saharan Africa. Urocit-K® is indicated for the treatment of calcium and uric acid kidney stones.
(1) EBITDA (earnings before interest, taxes, depreciation and amortization) does not have any standardized meaning under Canadian GAAP and therefore may not be comparable to similar measures presented by other companies. The Company defines EBITDA as earnings before interest expense, taxes, amortization, foreign exchange gains (losses), share of net income in companies subject to significant influence and unusual items; such as write-downs and gains (losses) on intellectual property and investments. EBITDA is calculated and presented consistently from period to period and agrees, on a consolidated basis, with the amount disclosed as "Earnings before under-noted items" on the consolidated statements of income. The Company believes EBITDA to be an important measurement that allows it to assess the operating performance of its ongoing business on a consistent basis without the impact of amortization expenses. The Company excludes amortization expenses because their level depends substantially on non-operating factors such as the historical cost of intangible and capital assets. The Company's method for calculating EBITDA may differ from that used by other issuers and, accordingly, this measure may not be comparable to EBITDA used by other issuers.
Conference Call Notice
Paladin will host a conference call to discuss its third quarter results on Thursday, November 4, 2010, at 10:00 a.m. ET. The dial-in number for the conference call is 800-954-0625 or 416-981-9000. The call will be audio-cast live and archived for 30 days at www.paladinlabs.com.
About Paladin Labs
Paladin Labs Inc., headquartered in Montreal, Canada, is a specialty pharmaceutical company focused on acquiring or in-licensing innovative pharmaceutical products. With this strategy, a focused national sales team and proven marketing expertise, Paladin has evolved into one of Canada's leading specialty pharmaceutical companies. For more information, please visit the Company's web site at www.paladinlabs.com
This press release may contain forward-looking statements and predictions. These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. The Company considers the assumptions on which these forward-looking statements are based to be reasonable at the time they were prepared, but cautions that these assumptions regarding the future events, many of which are beyond the control of the Company and its subsidiaries, may ultimately prove to be incorrect. Factors and risks, which could cause actual results to differ materially from current expectations, are discussed in the annual report as well as in the Company's Annual Information Form for the year ended December 31, 2009. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information or future events and except as required by law. For additional information on risks and uncertainties relating to these forward-looking statements, investors should consult the Company's ongoing quarterly filings, annual report and Annual Information Form and other fillings found on SEDAR at www.sedar.com.
CONSOLIDATED BALANCE SHEETS
(In thousands of Canadian dollars)
September 30 December 31
2010 2009
$ $
--------------------------------------------------------------------------
(unaudited) (audited (2))
ASSETS
Current
Cash and cash equivalents 16,740 31,227
Marketable securities 97,606 73,274
Accounts receivable 21,802 14,167
Inventories 13,281 12,361
Other current assets 5,634 2,668
Income taxes receivable - 4,630
Investment tax credits recoverable 147 776
Future income tax assets 8,975 6,196
--------------------------------------------------------------------------
Total current assets 164,185 145,299
Long-term marketable securities 13,023 868
Property, plant and equipment 261 691
Pharmaceutical product licences and
rights 25,437 42,543
Investments 23,230 62
Investments tax credits recoverable 14,858 14,903
Future income tax assets 23,866 31,029
--------------------------------------------------------------------------
Total assets 264,860 235,395
--------------------------------------------------------------------------
--------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued
liabilities 31,064 22,934
Accounts payable to related parties 436 1,122
Deferred revenue 2,258 1,776
Income taxes payable 10,782 7,109
Balance of sale payable 717 1,650
Future income tax liabilities 49 252
--------------------------------------------------------------------------
Total current liabilities 45,306 34,843
Long-term
Balance of sale payable 1,402 1,743
Future income tax liabilities 4,057 4,007
--------------------------------------------------------------------------
Total liabilities 50,765 40,593
--------------------------------------------------------------------------
Shareholders' equity
Capital stock 122,784 119,652
Other paid-in capital 4,702 4,408
Accumulated other comprehensive income 253 98
Retained earnings 86,356 70,644
--------------------------------------------------------------------------
Total shareholders' equity 214,245 194,802
--------------------------------------------------------------------------
Total liabilities and shareholders'
equity 264,860 235,395
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(2) Derived from the audited annual financial statements filed on SEDAR at
www.sedar.com
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of Canadian dollars except for share and per share amounts)
(unaudited)
Three-month periods Nine-month periods
ended September 30 ended September 30
2010 2009 2010 2009
--------------------------------------------------------------------------
Revenues 31,782 28,374 95,555 80,414
Cost of sales 7,721 7,676 25,746 21,399
--------------------------------------------------------------------------
Gross profit 24,061 20,698 69,809 59,015
--------------------------------------------------------------------------
Expenses (income)
Selling and marketing 5,473 6,455 16,675 18,851
General and administrative 1,865 1,904 6,591 6,235
Research and development 1,480 2,348 6,892 4,869
Interest income (641) (170) (1,435) (462)
--------------------------------------------------------------------------
Earnings before under-noted
items 15,884 10,161 41,086 29,522
--------------------------------------------------------------------------
Amortization of pharmaceutical
product licenses and rights 5,146 6,389 17,487 18,453
Net gain on investments - (11) (7) (503)
Foreign exchange (gain) loss (300) 128 (99) 132
Other income - (557) (41) (667)
Share of net income in
companies subject to
significant influence (291) - (757) -
--------------------------------------------------------------------------
Income before income taxes 11,329 4,212 24,503 12,107
--------------------------------------------------------------------------
Provision for income taxes
Current 1,763 1,572 4,601 (462)
Future 1,584 76 4,190 5,182
--------------------------------------------------------------------------
3,347 1,648 8,791 4,720
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Net income before
extraordinary gain 7,982 2,564 15,712 7,387
--------------------------------------------------------------------------
Extraordinary gain (net of
$nil taxes) - - - 25,959
--------------------------------------------------------------------------
Net income for the period 7,982 2,564 15,712 33,346
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Earnings per share before
extraordinary gain
Basic 0.43 0.14 0.84 0.45
Diluted 0.41 0.13 0.81 0.44
Earnings per share
Basic 0.43 0.14 0.84 2.03
Diluted 0.41 0.13 0.81 1.98
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Weighted average number of
shares outstanding
Basic 18,746,237 18,501,987 18,670,511 16,392,384
Diluted 19,406,637 19,059,385 19,303,642 16,866,256
--------------------------------------------------------------------------
--------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of Canadian dollars)
(unaudited)
Three-month periods Nine-month periods
ended September 30 ended September 30
2010 2009 2010 2009
----------------------------------------------------------------------------
Operating activities
Net income 7,982 2,564 15,712 33,346
Add items not affecting cash
Extraordinary gain - - - (25,959)
Amortization 5,204 6,476 17,972 18,663
Future income taxes 1,584 76 4,190 5,182
Stock based compensation
expense 416 483 1,375 1,572
Unrealized foreign exchange
(gain) loss (329) 146 (139) 189
Net gain on investments - (11) (7) (504)
Net accreted interest (income)
expense (61) 98 (129) 97
Gain on disposal of
pharmaceutical product
licenses and rights - (557) - (557)
Share of net income in
companies subject to
significant influence (291) - (757) -
----------------------------------------------------------------------------
14,505 9,275 38,217 32,029
----------------------------------------------------------------------------
Net change in non-cash balances
relating to operations 6,893 (3,180) 8,675 (6,349)
----------------------------------------------------------------------------
Cash flows from operating
activities 21,398 6,095 46,892 25,680
----------------------------------------------------------------------------
Investing activities
Acquisition of investments (300) - (25,295) (130)
Repayment of balance of sale
payable - - (1,650) -
Additions to pharmaceutical
product licenses and rights - - - (5,476)
Business acquisition - - - (7,594)
Acquisition of property, plant
and equipment (18) (115) (67) (224)
Purchases of short-term
marketable securities (30,289) (28,624) (101,197) (71,974)
Maturities of short-term
marketable securities 16,637 13,781 91,106 25,079
Purchases of long-term
marketable securities (4,969) (2,567) (26,366) (13,771)
Proceeds from the disposal of
investments - - 27 6,979
Proceeds from disposal of
pharmaceutical product licenses
and rights - 442 - 442
----------------------------------------------------------------------------
Cash flows used in investing
activities (18,939) (17,083) (63,442) (66,669)
----------------------------------------------------------------------------
Financing activities
Net proceeds on issuance of
common shares 613 248 2,023 56,997
Repurchase of common shares - (72) - (72)
----------------------------------------------------------------------------
Cash flows from financing
activities 613 176 2,023 56,925
----------------------------------------------------------------------------
Foreign exchange rate change on
cash and cash equivalents 29 (17) 40 (56)
Net change in cash and cash
equivalents during the period 3,101 (10,829) (14,487) 15,880
Cash and cash equivalents,
beginning of period 13,639 31,354 31,227 4,645
----------------------------------------------------------------------------
Cash and cash equivalents, end
of period 16,740 20,525 16,740 20,525
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash and cash equivalents 16,740 20,525
Short-term marketable securities 97,606 65,450
Long-term marketable securities 13,023 11,656
----------------------------------------------------------------------------
127,369 97,631
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Contacts:
Paladin Labs Inc.
Samira Sakhia
Chief Financial Officer
514-669-5367
514-344-4675 (FAX)
info@paladinlabs.com
www.paladinlabs.com
