MDS Pharma Services had an operating loss of $1 million for the quarter, compared to a loss of $15 million for the same period last year. This reduction in operating loss was driven by lower costs in the first quarter of 2008 resulting from the restructuring actions taken in 2007; a $2 million reduction in stock-based compensation costs in the first quarter of 2008; a $2 million gain related to the settlement of a mortgage that in 2000 had been determined uncollectible and a $3 million foreign currency gain on the revaluation of certain assets and liabilities in the quarter, compared to a $2 million gain the first quarter of 2007. As well, in the first quarter of 2007, our operating loss reflects $8 million of restructuring charges and $4 million of spending on the US Food and Drug Administration (FDA) review of our Montreal bioanalytical operations. In the first quarter of 2008 there was no impact to operating income from these items, although we did spend $2 million on the FDA matter and it was charged to the reserve we established for this purpose in the second quarter of 2007. Partially offsetting these reductions in our operating loss was the lower amount of gross profit associated with the net revenue declines, excluding the impact of foreign exchange, described in our discussion of net revenues, and the negative impact of foreign exchange on our operations resulting from the decline in the US dollar from the first quarter of 2007 to the first quarter of 2008 of approximately $3 million.
Adjusted EBITDA for MDS Pharma Services for the first quarter of 2008 was $6 million, up substantially from $1 million for the first quarter of 2007 driven by restructuring savings and the other items described above, except that the $2 million gain on the mortgage settlement in the first quarter of 2008 and the $8 million restructuring charges in the first quarter of 2007 were adjusting items.
SG&A of $29 million in the first quarter o
|SOURCE MDS Inc.|
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