Salix Pharmaceuticals, Ltd., a specialty pharmaceutical company headquartered in Raleigh, North Carolina, reports that the company’s Audit Committee of of its Board of Directors, in consultation with its outside advisors and management, has determined that the company's previously issued consolidated financial statements for the full year 2013 and the first three quarters of 2014 require correction of certain errors and should no longer be relied upon. These restatements were based upon the results of an accounting review, conducted by outside counsel reporting to the Audit Committee and BDO Consulting, of potential accounting and financial reporting issues associated with sales to wholesalers and other wholesaler-related transactions.

The errors, which are primarily related to the timing for recognition of certain revenue, revenue-reducing returns and discounts, and expense items, will be corrected in the company's restated financial statements. Salix believes the cumulative impact for correcting these matters over all previously reported periods affected by the restatement will decrease previously reported net product revenue and net income by approximately $20.7 million and $11.9 million, respectively. For the full year 2013, this would decrease previously reported net product revenue and net income by approximately $20.1 million and $11.8 million, respectively. For the nine months ended September 30, 2014, this would decrease previously reported net product revenue by $0.7 million and result in no change in net loss.

Subject to completion, the restatements are expected to have the following effects:
• Previously reported net product revenue, net income and diluted net income per share will be decreased by approximately $20.1 million, $11.8 million and $0.18 per share, respectively, for the full year 2013, as compared to originally reported amounts.
• Previously reported net product revenue will be increased by approximately $18.6 million, and net loss and diluted net loss per share will be decreased by approximately $8.9 million and $0.14 per share, respectively, for the three months ended March 31, 2014, as compared to originally reported amounts.
• Previously reported net product revenue, net income and diluted net income per share will be decreased by approximately $6.5 million, $3.4 million and $0.04 per share, respectively, for the three months ended June 30, 2014, as compared to originally reported amounts.
• Previously reported net product revenue will be decreased by approximately $12.8 million, and net loss and diluted net loss per share will be increased by approximately $5.5 million and $0.09 per share, respectively, for the three months ended September 30, 2014, as compared to originally reported amounts.

Source: Salix Pharmaceuticals