Plans Non-Cash Write-Down for MAPLE Asset and MDS Pharma Services Goodwill
TORONTO, Dec. 10 /PRNewswire-FirstCall/ - MDS Inc. (TSX: MDS; NYSE: MDZ), a leading provider of products and services to the global life-sciences markets, today provided an update for fiscal 2008 performance.
Based on preliminary information, MDS expects to report year-end fiscal 2008 net revenue in the range of $1,210 million to $1,220 million and adjusted EBITDA in the range of $148 million to $154 million. MDS's fiscal 2008 net revenue guidance range was $1,230 million to $1,250 million and its adjusted EBITDA guidance range was $160 million to $170 million. The change in forecasted performance is due primarily to foreign exchange fluctuations, which include an embedded derivative charge, and soft demand in some segments of the Company's North American customer base.
MDS also announced that it will incur a non-cash after-tax charge of approximately $260 million to write off the net book value of its MAPLE nuclear-reactor project asset. The Company also expects to take a non-cash write-down of MDS Pharma Services goodwill in the range of $270 million to $370 million, as a result of the decline in overall contract research organization stock market valuations, current economic uncertainty and the delay in profit recovery. These non-cash charges will result in a net loss below the Company's 2008 guidance range.
As a result of these non-cash charges, certain debt covenants will restrict MDS from repurchasing shares for the foreseeable future.
"These two write-downs will have no impact on our cash position and our day-to-day operations at MDS Nordion and MDS Pharma Services," said Stephen P. DeFalco, President and Chief Executive Officer, MDS Inc. "With respect to the MAPLE asset, we have determined that we are required t
|SOURCE MDS Inc.|
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