Valeant Pharmaceuticals Reports Preliminary Unaudited Fourth Quarter 2015 Financial Information

OREANDA-NEWS. Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) (the "Company") today announced preliminary unaudited financial information for the fourth quarter 2015.

As a result of the ongoing work of the Company's Ad Hoc Committee of the Board of Directors appointed to review the Company's relationship with Philidor and related matters, and the Company's ongoing assessment of the impact of the committee's findings on financial reporting and internal controls, the unaudited fourth quarter 2015 results are preliminary and, as previously announced, the Company has delayed the filing of its Annual Report on Form 10-K for the year ended December 31, 2015. The Company is working diligently and intends to file the Form 10-K as promptly as reasonably practicable.

Fourth Quarter 2015 Preliminary Highlights:

• Unaudited Revenue of $2.8 billion
• Unaudited GAAP EPS ($0.98); Adjusted EPS (non-GAAP) $2.50
• Unaudited GAAP Cash Flow from Operations $562 million; Adjusted Cash Flow from Operations (non-GAAP)  $838 million

Preliminary unaudited fourth quarter results were impacted by softer-than-expected sales of the gastrointestinal business, as compared to previous guidance issued in December, driven by reductions in the wholesale and retail channel in reaction to Valeant's announcement of an agreement with Walgreens.

First Quarter 2016 Guidance Update

• Total Revenue expected to be $2.3 - $2.4 billion from previous guidance of $2.8 - $3.1 billion
• Adjusted EPS (non-GAAP) expected to be $1.30 - $1.55 from previous guidance of $2.35 - $2.55

First quarter 2016 results have been impacted by continued inventory destocking in dermatology and GI, revenue shortfalls in several business such as Ophthalmology Rx, Commonwealth, Western Europe, Women's Health, Solta and Obagi, and little to no corresponding cost reductions to compensate.  In addition, management transition issues and continued organizational distractions are expected to negatively impact operations during the quarter.  

2016 Guidance Update

• Total Revenue expected to be $11.0 - $11.2 billion from previous guidance of $12.5 - $12.7 billion
• Adjusted EPS (non-GAAP) expected to be $9.50 - $10.50 from previous guidance of $13.25 - $13.75
• Adjusted EBITDA (non-GAAP) expected to be $5.6 - $5.8 billion from previous guidance of $6.9 - $7.1 billion

Financial guidance for 2016 reflects reduced revenue assumptions for certain businesses, new managed care contracts and increased investment in key functions, such as financial reporting, public and government relations and compliance, as well as the impact of the weak first quarter of 2016. 

To get a better sense of our business on a go forward basis, we are also providing guidance for the next four quarters – Second Quarter 2016 through First Quarter 2017.

Next Four Quarters (Second Quarter 2016 – First Quarter 2017) Guidance

• Total Revenue expected to be $11.6 - $11.8 billion
• Adjusted EPS (non-GAAP) expected to be $10.75 - $11.25
• Adjusted EBITDA (non-GAAP) expected to be ~$6.2 - $6.6 billion

"The challenges of the past few months are not yet behind us and our goal for 2016 is to better balance our priorities across all of our constituencies - physicians, patients, employees, payors, debt holders and shareholders," said J. Michael Pearson, chief executive officer. "I want to again thank all our dedicated employees, as well as the entire management team, for their diligence throughout this difficult time to ensure that the business remains solid."

Pearson continued, "In discussion with the Board, we have assumed lower growth in our U.S. dermatology, gastrointestinal, and woman's health portfolios, as well as certain geographies like Western Europe, while keeping our expenses largely unchanged.  We plan to work hard to improve these metrics by delivering higher revenues and reducing our costs and, if successful, we hope to beat this guidance in the quarters to come. In the meantime, we are comfortable with our current liquidity position and cash flow generation for the rest of the year, and remain well positioned to meet our obligations."

Note About Preliminary Results

The financial results presented in this release are preliminary and may change. This preliminary financial information includes calculations or figures that have been prepared internally by management and have not been reviewed or audited by our independent registered public accounting firm.  There can be no assurance that the Company's actual results for the period presented herein will not differ from the preliminary financial data presented herein and such changes could be material.  This preliminary financial data should not be viewed as a substitute for full financial statements prepared in accordance with GAAP and is not necessarily indicative of the results to be achieved for any future periods.  This preliminary financial information, and previously reported amounts, could be impacted by the effects of the pending review of the Ad Hoc Committee of the Board of Directors.

Conference Call and Webcast Information

About Valeant

Valeant Pharmaceuticals International, Inc. (NYSE/TSX:VRX) is a multinational specialty pharmaceutical company that develops, manufactures and markets a broad range of pharmaceutical products primarily in the areas of dermatology, gastrointestinal disorder, eye health, neurology and branded generics.