great guidance
Concordia expects 2016 revenue of up to $1,060M (U.S.)
2015-10-26 07:53 ET - News Release
Mr. Mark Thompson reports
CONCORDIA HEALTHCARE ANNOUNCES PRELIMINARY 2016 GUIDANCE
Concordia Healthcare Corp. has released its preliminary guidance for 2016.
For the full 2016 fiscal year, Concordia estimates1:Revenues of US$1,020 million to US$1,060 millionAdjusted EBITDA2 of US $610 million to US$640 millionAdjusted net income2 of US$330 million to US$355 million; adjusted earnings per share (EPS)2, 3 of US$6.29 to US$6.77Approximately 60 percent of revenues to be generated outside the U.S Target 2016 year-end Net Debt/EBITDA of 5.5x or below Cash interest rate of approximately 6.95 percent Cash tax rate of 9 percent to 10 percent
With the close of the acquisition of Amdipharm Mercury Limited ("AMCo") on October 21, 2015, Concordia is expected to more than double the size of its business, with expected revenues of more than one billion U.S. dollars. In 2016, the Company anticipates that approximately 60 percent of revenues will be generated outside the United States, with U.S. government payors expected to account for less than 10 percent of overall revenue.
For the full year 2016, Concordia anticipates adjusted EBITDA of US$610 million to US$640 million. The Company also expects adjusted net income of US$330 million to US$355 million, and anticipates adjusted EPS3 of US$6.29 to US$6.77. In addition, cash interest expense is expected at a rate of approximately 6.95 percent (excluding original issue discount), while cash taxes are expected at a rate of 9 percent to 10 percent. In addition, 2016 guidance assumes that the gross profit targets for the pounds sterling144 million (approximately US$220 million1) earn-out payment ("earn-out") to the sellers of AMCo have been fully met, and that the entire payment has been financed from the Company's 2016 operating cash flow.
"Today marks the beginning of the next stage of the evolution of Concordia," said Mark Thompson, Concordia's founder, Chairman and Chief Executive Officer. "With the provision of 2016 guidance, we look forward to continuing to provide our shareholders with meaningful information with respect to the future trajectory of our business."
Concordia is targeting 2016 year-end Net Debt/EBITDA of 5.5x or below, and expects to have approximately US$130 million cash on hand and an undrawn revolving credit facility of US$200 million at the end of 2016. After 2016, the Company plans to use its anticipated strong free cash flow to pay down debt and further invest in the growth of its business, targeting leverage between 4x and 5x.
Management expects high single-digit revenue growth of the combined business over the next three years (2015-2018), driven primarily by expected organic volume growth through continued promotion of its legacy products and up to 60 new product launches. During this period, the Company's non-U.S. revenues are expected to grow at mid-teen rates, with anticipated double-digit organic volume growth, while Concordia's U.S. base legacy business is expected to remain stable, growing at low single digits, in roughly equal parts price and volume. All of the Company's legacy products are sold into and distributed through traditional distributors and pharmacies.