Atrium Innovations Announces 2012 Third Quarter Financial Results
Strong Organic Revenue Growth, Best Quarter since 2008
QUEBEC CITY, Nov. 7, 2012 /PRNewswire/ – Atrium Innovations Inc. (TSX: ATB), a globally recognized leader in the development,
manufacturing and commercialization of innovative, science-based
dietary supplements endorsed by health professionals, today released
its results for the quarter ended September 30, 2012.
Third Quarter 2012 Highlights:
(All amounts are in US dollars.)
-- Total revenue growth was all organic: 11% over last year, or 14% on a currency-neutral basis, to reach $107.6 million -- Total branded revenue recorded solid organic growth of 13%, on a currency-neutral basis -- EBITDA of $21.3 million or 19.8% of revenue, a decline mostly related to a lower Euro/USD exchange rate -- Adjusted diluted EPS of $0.42 for the quarter, a slight increase of 2% over last year despite the unfavourable exchange rate -- Cash flows before working capital and interest remain strong at $18.3 million -- Closure of British Columbia manufacturing facility completed as planned -- First time launch of a new brand - Klean Athlete(TM)
“The results for the third quarter were in line with Management’s
outlook and reflect the continued focus and priority placed on organic
growth across all our brands. Total branded revenue growth of 13% for
the quarter over last year represents our best performance in over 4
years. The exceptional performance of Retail Branded in North America
must be highlighted with growth of just over 40% over 2011. While total
revenues in Europe were under pressure due to difficult economic
conditions in the Netherlands, we continue to be pleased with our of Wobenzym(®) sales in Germany as Wobenzym(®) Plus continues to enjoy sell-out increases over last year,” said Pierre
Fitzgibbon, President and CEO.
“Our EBITDA margin improved slightly over the second quarter of 2012 to
19.8% and stands at 20.0% year-to-date. We expect the EBITDA margin to
remain relatively stable in the fourth quarter when compared with the
“In the quarter, Douglas Laboratories(®) introduced a new brand, Klean Athlete, targeting a new high growth category (“sports nutrition”) for Atrium.
We made the decision to address the sports nutrition market via the
development of an internal brand rather than through an acquisition. So
far, the market reception has been very positive.
“Our industry continues to grow at a healthy pace. We are well
positioned to take advantage of it, and our commitment to improving
revenue from organic growth is showing tangible results. We will focus
throughout 2013 on optimizing our U.S. manufacturing environment as we
complete the implementation of our ERP program”, concluded Mr.
For the quarter ended September 30, 2012, Atrium recorded revenues of
$107.6 million representing an increase of 11% (14% on a
currency-neutral basis) compared to revenues of $97.0 million in 2011.
The increase, all organic, is mainly attributable to the solid
performance of our branded products with organic growth of 13%
including solid momentum of HCP and HFS brands and also to the private
EBITDA for the quarter was $21.3 million or 19.8% of revenues compared
to $22.4 million or 23.1% of revenues for the same period in 2011. The
EBITDA decreased by $1.1 million year over year largely explained by
the unfavourable euro/USD exchange rate with an impact of $0.8 million.
Net earnings attributable to shareholders were $13.4 million for the
third quarter in 2012 compared to $13.4 million in 2011, while net
earnings per share (“EPS”) on a diluted basis were $0.40 per share, as
compared to $0.38 per share for the same period in 2011. The adjusted
diluted EPS were $0.42 in 2012 compared to adjusted diluted EPS of
$0.41 in 2011.
Cash flows from operating activities before changes in non-cash working
capital items and interest expenses were $18.3 million compared to
$19.2 million in 2011. As at September 30, 2012, the Company had a
total debt of $285.0 million and a cash position of $13.7 million.
“Over the past four quarters, we have taken advantage of what we believe
is an attractive valuation of our shares to use our Normal Course
Issuer bid (NCIB) program and thereby reduce the number of outstanding
shares by over 1.2 million to the benefit of our shareholders.
Considering our solid and stable cash flows, we remain comfortable with
our balance sheet and debt level,” said Mario Paradis, Vice President
About Atrium Innovations
Atrium Innovations Inc. is a globally recognized leader in the development, manufacturing and
commercialization of innovative, science-based dietary supplements
endorsed by health professionals. The Company distributes its extensive
portfolio of products mainly in the healthcare practitioner and health
food and specialized store channels, with a primary focus in North
America and Europe. Atrium is at the forefront of science, innovation
and education in the dietary supplement industry. The Company has over
1,100 employees and operates seven manufacturing facilities.
Additional information is available at www.atrium-innovations.com.
Conference Call and Webcast
Atrium will hold its quarterly conference call and webcast to discuss
its 2012 third quarter results on November 8, 2012 at 8:00 a.m.,
Eastern Time. Participants may access the call by using the following
numbers: 514-807-9895 (Montreal Area), 888-231-8191 (Toll Free) or
647-427-7450 (Toronto area and overseas). A live webcast is also
available via the Company’s website at www.atrium-innovations.com in the News Center section. A replay of the webcast will also be available on our website
for a period of 30 days. A copy of Atrium’s financial statements will
also be available on the Company’s website.
Caution Regarding Non-IFRS Financial Measures
The Company provides non-IFRS financial measures (Gross profit*, EBIT*,
EBITDA*, and Adjusted EPS*) as supplemental information regarding its
operational performance. These non-IFRS financial measures are
directly derived from the Company’s financial statements and are
presented in a consistent manner. The Company uses these measures for
the purposes of evaluating its historical and prospective financial
performance, as well as its performance relative to competitors. These
measures also help the Company to plan and forecast for future periods
as well as to make operational and strategic decisions. The Company
believes that providing this information to investors, in addition to
IFRS measures, allows them to see the Company’s results through the
eyes of management, and to better understand its historical and future
The presentation of this additional information is not prepared in
accordance with IFRS. Therefore, the information may not necessarily
be comparable to that of other companies and should be considered as a
supplement to, not a substitute for, or superior to, the comparable
measures calculated in accordance with IFRS.
*Gross profit means revenue less cost of sales. EBIT means earnings
before interest and tax. EBITDA means earnings before interest, tax,
depreciation, amortization, restructuring and acquisition costs.
Adjusted EPS means EPS without giving the dilutive effect of the
Cautionary Note and Forward-Looking Statements
This press release contains certain forward-looking statements with
respect to the Company. These forward-looking statements, by their
nature, require the Company to make certain assumptions and necessarily
involve known and unknown risks and uncertainties that could cause
actual results to differ materially from those expressed or implied in
these forward-looking statements. Forward-looking statements are not
guarantees of performance. These forward-looking statements, including
financial outlooks, may involve, but are not limited to, comments with
respect to the Company’s business or financial objectives, its
strategies or future actions, its targets, expectations for financial
condition or outlook for operations and future contingent payments.
Words such as “may”, “will”, “would”, “could”, “expect”, believe”,
“plan”, “anticipate”, “intend”, “estimate”, “continue”, or the negative
or comparable terminology, as well as terms usually used in the future
and the conditional, are intended to identify forward-looking
statements. Information contained in forward-looking statements is
based upon certain material assumptions that were applied in drawing a
conclusion or making a forecast or projection, including management’s
perceptions of historical trends, current conditions and expected
future developments, as well as other considerations that are believed
to be appropriate in the circumstances. The Company considers theses
assumptions to be reasonable based on information currently available
to it, but cautions the reader that these assumptions regarding future
events, many of which are beyond its control, may ultimately prove to
be incorrect since they are subject to risks and uncertainties that
affect the Company and its business.
For additional information with respect to these and other factors and
assumptions underlying the forward-looking statements made in this
press release, see the Company’s quarterly and annual Management
Discussion and Analysis filed with the Canadian securities
commissions. The forward-looking information set forth herein reflects
the Company’s expectations as at the date of this press release and is
subject to change after such date. The Company disclaims any intention
or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
other than as required by law.
Attachments: Financial Summary Balance sheet, results and cash flow statement
Atrium Innovations Inc. Financial Summary (unaudited) (in millions of US dollars except per share amounts) Consolidated results for the quarters ended September 30, 2012 2011 Change $ $ Revenues 107.6 97.0 +11% Gross profit (1) 54.5 52.2 50.7% 53.8% EBITDA (2) 21.3 22.4 -5% 19.8% 23.1% Net earnings attributable to shareholders 13.4 13.4 - Diluted net earnings per share 0.40 0.38 +5% Reconciliation to non IFRS Financial Data Net earnings attributable to shareholders 13.4 13.4 Interest expenses for acquisition-related - 0.1 contingent liabilities Adjusted net earnings under non-IFRS 13.4 13.5 - Adjusted diluted net earnings per share under non-IFRS (3) 0.42 0.41 +2% (1) Gross profit means revenue less cost of sales. (2) EBITDA means earnings before interest, taxes, depreciation, amortization, restructuring and acquisition-related costs. (3) Without giving the dilutive effect of the convertible debentures.
Atrium Innovations Inc. Financial Summary (unaudited) (in millions of US dollars except per share amounts) Consolidated results for the nine-month period ended September 30, 2012 2011 Change $ $ Revenues 327.0 309.9 +6% Gross profit (1) 169.0 167.9 51.7% 54.2% EBITDA (2) 65.4 69.6 -6% 20.0% 22.5% Net earnings attributable to shareholders 37.3 41.9 -11% Diluted net earnings per share 1.09 1.24 -12% Reconciliation to non IFRS Financial Data Net earnings attributable to shareholders 37.3 41.9 Provision for restructuring costs, net of related taxes 2.9 - Interest expenses for acquisition-related contingent liabilities 0.1 0.2 Adjusted net earnings under non-IFRS 40.3 42.1 -4% Adjusted diluted net earnings per share under non-IFRS (3) 1.26 1.27 -1% (1) Gross profit means revenue less cost of sales. (2) EBITDA means earnings before interest, taxes, depreciation, amortization, restructuring and acquisition-related costs. (3) Without giving the dilutive effect of the convertible debentures.
Atrium Innovations Inc. Consolidated Balance Sheets (Expressed in thousands of US dollars) As at September 30, As at December 31, 2012 2011 $ $ Assets Current assets Cash 13,740 22,800 Accounts receivable 55,162 52,189 Income taxes recoverable 5,551 5,841 Inventory 100,698 93,250 Prepaid expenses 7,868 4,588 183,019 178,668 Property, plant and equipment 24,089 23,296 Deferred charges and others 4,052 4,218 Intangible assets 263,120 257,853 Goodwill 358,241 356,275 Deferred tax assets 2,283 5,634 834,804 825,944 Liabilities Current liabilities Accounts payable and accrued 35,251 44,122 liabilities Provision 1,344 - Contingent considerations - 15,234 Income taxes 501 1,263 Deferred revenues 214 157 Derivative financial instruments - 704 Current portion of long-term 362 292 debt 37,672 61,772 Contingent considerations - 479 Long-term debt 191,573 191,169 Convertible debentures 93,080 91,819 Deferred revenues - 75 Derivative financial instruments 1,270 - Deferred tax liabilities 66,728 67,056 390,323 412,370 Equity Share capital 89,132 91,658 Stock options reserve 2,810 2,394 Retained earnings 367,492 337,201 Accumulated other comprehensive (15,001) (17,706) loss 444,433 413,547 Non-controlling interest 48 27 444,481 413,574 834,804 825,944
Atrium Innovations Inc. Consolidated Statements of Earnings (tabular amounts in thousands of US dollars, except share and per share data) Quarters ended September Nine months ended 30, September 30, 2012 2011 2012 2011 $ $ $ $ Revenues 107,621 96,988 327,040 309,901 Operating expenses Cost of sales 53,110 44,774 158,043 142,001 Selling and 35,099 31,130 109,216 101,910 administrative expenses Research and 468 902 1,761 2,037 development costs Restructuring - - 4,000 - costs 88,677 76,806 273,020 245,948 Earnings from 18,944 20,182 54,020 63,953 operations Other revenues (expenses) Financial 79 92 278 207 revenues Financial (3,232) (3,674) (10,485) (8,417) expenses Foreign 549 (102) 988 (344) exchange gain (loss) Change in fair 449 665 2,910 665 value of embedded derivative (2,155) (3,019) (6,309) (7,889) Earnings before 16,789 17,163 47,711 56,064 income taxes Income tax 3,324 3,741 10,424 13,538 expense Net earnings 13,465 13,422 37,287 42,526 for the period Net earnings for the period attributable to Shareholders 13,402 13,351 37,266 41,912 Non-controlling 63 71 21 614 interest Net earnings per share Basic 0.43 0.41 1.18 1.28 Diluted 0.40 0.38 1.09 1.24 Weighted average number of shares outstanding (000's) Basic 31,456 32,622 31,644 32,706 Diluted 35,719 35,675 35,907 33,995
Atrium Innovations Inc. Consolidated Statements of Cash Flows (expressed in thousands of US dollars) Quarters ended September Nine months ended 30, September 30, 2012 2011 2012 2011 $ $ $ $ Cash flows from operating activities Net earnings for 13,465 13,422 37,287 42,526 the period Adjustments for: Depreciation 2,373 2,053 7,405 5,438 and amortization Deferred 274 399 772 658 charges Deferred (78) (84) (26) (782) revenues Change in fair (449) (665) (2,910) (665) value of embedded derivative Stock-based 105 208 416 496 compensation costs Interest 2,892 3,166 9,389 7,224 expense Deferred income 512 731 1,854 2,071 taxes Foreign (799) - (50) - exchange gain on long-term debt Change in (6,842) (7,714) (17,579) (19,321) non-cash operating working capital items Cash flows from 11,453 11,516 36,558 37,645 operating activities Cash flows from financing activities Increase in - 4,078 12,090 236,976 long-term debt Payments on (2,088) (101,155) (10,058) (326,757) long-term debt Proceed from the - 101,081 - 101,081 issuance of convertible debentures Financing costs (5) (4,044) (89) (4,472) Issuance of - - - 347 shares Shares redeemed - (1,362) (9,501) (4,612) and cancelled under a normal course issuer bid Interest paid (4,023) (1,686) (10,372) (4,904) Cash flows used (6,116) (3,088) (17,930) (2,341) in financing activities Cash flows from investing activities Business (951) (4,250) (15,760) (20,515) acquisitions, net of cash acquired Purchase of (794) (925) (4,459) (2,622) property, plant and equipment Proceeds from - - 225 - disposal of property, plant and equipment Additions to (1,433) (3,151) (7,053) (8,182) intangible assets Cash flows used (3,178) (8,326) (27,047) (31,319) in investing activities 2,159 102 (8,419) 3,985 Effect of (57) (1,485) (641) (2,374) exchange rate changes on cash Increase 2,102 (1,383) (9,060) 1,611 (decrease) in cash Cash - Beginning 11,638 15,043 22,800 12,049 of period Cash - Ending of 13,740 13,660 13,740 13,660 period
SOURCE ATRIUM INNOVATIONS INC.