Atrium Innovations Announces 2013 Third Quarter Financial Results

Another Strong Performance - Q3 Solid Organic Growth

MONTREAL, Nov. 11, 2013 /CNW Telbec/ - Atrium Innovations Inc. (TSX: ATB) ("Atrium" or "the Company"), a globally recognized leader in the development, manufacturing and commercialization of innovative, science-based natural health products, today released its results for the third quarter ended September 30, 2013.

Third Quarter 2013 Highlights: (All amounts are in US dollars.)

  • Revenue of $121 million, representing 12% organic growth (10.6% currency neutral)
  • EBITDA of $23 million or 19.4% of revenue, an increase of 7% over last year
  • Adjusted diluted EPS of $0.41 for the quarter
  • Operating cash flows before changes in non-cash working capital of $20 million
  • Recently acquired 70% of Mucos Pharma CZ

"Our momentum was maintained in the third quarter with organic growth of 12% and an EBITDA margin of 19.4% in-line with our guidance range. We are pleased by the performance of all our business units in North America as we continue to further leverage our solidly established Healthcare Practitioner and Retail platforms. Our European operations are basically flat while market conditions there remain challenging," said Pierre Fitzgibbon, President and CEO.

"The recent acquisition of a controlling stake in Mucos Pharma CZ will reinforce our position in Central and Eastern Europe with Wobenzym and will eventually be leveraged with cross-selling opportunities. As indicated before, this transaction will be accretive to net income immediately following the depletion of the inventory purchased by Mucos Pharma CZ prior to the transaction which we expect for the end of the year. Consequently, our fourth quarter 2013 consolidated gross and EBITDA margins will be temporarily negatively impacted.

"As we complete fiscal 2013, we remain focused on executing our plan for operational improvements targeting the integration of certain key functions and the optimization of our supply chain. As we stride towards operational excellence and build on the strength of our leading brands, these further enhance our competitive position," concluded Mr. Fitzgibbon.

For the quarter ended September 30, 2013, Atrium recorded revenues of $120.5 million, representing an increase of 11.9%, compared to revenues of $107.6 million in 2012. The increase was mainly driven by the continuing solid performance of the North American Retail and Healthcare Practitioner as well as Private Label channels, with growth of 16.2%, 8.7% and 15.2%, respectively. Without the currency impact, revenue growth would have been 10.6%.

EBITDA for the quarter was $23.3 million or 19.4% of revenues compared to adjusted EBITDA of $21.8 million or 20.3% of revenues for the same period in 2012. The EBITDA increase of $1.5 million over last year is largely due to higher revenues.

Net income attributable to shareholders was $10.7 million in 2013 compared to $13.4 million in 2012, while adjusted earnings per share on a diluted basis was $0.41, unchanged from the same period in 2012. Without the after-tax impact of the convertible debentures, the net income would have increased by $3.9 million to reach $14.6 million during the quarter versus $14.4 million last year. See table below for full details of reconciliation to the 2012 adjusted financial data.

Cash flows from operating activities before changes in non-cash working capital items and interests were $19.9 million compared to adjusted cash flows from operating activities before changes in non-cash working capital items and interests of $18.6 million in 2012.

During the quarter, under the NCIB (Normal Course Issuer Bid) program, the Company repurchased and cancelled 55,784 common shares for a total consideration of $0.9 million.

About Atrium Innovations

Atrium Innovations Inc. (TSX: ATB) is a globally recognized leader in the development, manufacturing, and commercialization of innovative, science-based natural health products which are distributed in more than 35 countries.  The Company owns healthcare practitioner and specialized retail product brands that are at the forefront of science, innovation and education.  Atrium has over 1,300 employees and operates seven manufacturing facilities complying with current Good Manufacturing Practices.  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 2013 third quarter results on November 12, 2013 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). They may also access the live webcast via the Company's website at www.atrium-innovations.com in the Presentation & Events section of the News Center menu.  The replay of the webcast will also remain available 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-GAAP Financial Measures

The Company provides non-GAAP financial measures (Gross profit*, EBIT*, EBITDA*, Adjusted EBITDA*, Adjusted net income*, Adjusted cash flows from operating activities* and Adjusted earnings per share ("EPS") *) as supplemental information regarding its operational performance.  These non-GAAP 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 financial performance.

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 revenues less cost of sales. EBIT means net income excluding other revenues (expenses) and the income tax expense. EBITDA means the addition of EBIT and depreciation/amortization. Adjusted EBITDA means the addition of EBIT, depreciation and amortization, restructuring costs, goodwill impairment, regulatory legal contingencies and related legal costs, one-time ERP-related inventory adjustment and acquisition-related costs. Adjusted net income means the addition of net income attributable to shareholders and the after-tax amount of restructuring costs, acquisition-related costs, interest expenses for acquisition-related contingent liabilities, goodwill impairment, legal contingencies and related legal costs and one-time ERP-related inventory adjustment. Adjusted cash flows from operating activities is calculated using cash flows from operating activities before changes in non-cash working capital items less the impact of restructuring costs,  legal contingencies and related legal costs and one-time inventory adjustment net of taxes. Adjusted EPS are calculated using the adjusted net income. The adjusted diluted EPS also take into account the impact of the convertible debentures even if it is anti-dilutive under IFRS.

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

Atrium Innovations Inc.
Financial Summary (unaudited)
(in millions of US dollars except per share amounts)

Consolidated results for the quarters ended September 30,

  2013   2012   Change  
  $   $      
             
Revenues 120.5   107.6   +11.9%  
             
Gross profit (1) 59.2   54.5      
  49.2%   50.7%      
             
EBITDA 23.3   21.8 (2)   +6.9%  
  19.4%   20.3%      
             
Net income attributable to shareholders 10.7   13.4      
             
Diluted EPS 0.34   0.40      
             
Reconciliation to non-GAAP Financial Data            
             
Net income attributable to shareholders 10.7   13.4      
Convertible debentures impact, after-tax 3.9   1.0      
Regulatory legal contingency and related costs, after-tax -   0.3      
Adjusted diluted net income 14.6   14.7      
             
Adjusted Diluted EPS    0.41(3)   0.41   -  
             
(1)  Gross profit means revenues less cost of sales.
(2)  2012 adjusted EBITDA means income before interest, tax, depreciation, amortization and regulatory legal contingency and related costs.
(3)  Take into account the dilutive impact of the convertible debentures that are having an anti-dilutive effect under IFRS.

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,

  2013   2012   Change  
  $   $      
             
Revenues 361.4   327.0   +10.5%  
             
Gross profit (1) 178.9   169.0      
  49.5%   51.7%      
             
EBITDA 70.5   66.3 (2)   +6.4%  
  19.5%   20.3%      
             
Net income attributable to shareholders 38.0   37.3      
             
Diluted EPS 1.21   1.09      
             
Reconciliation to non-GAAP Financial Data            
             
Net income attributable to shareholders 38.0   37.3      
Convertible debentures impact, after-tax 7.6   1.7      
Restructuring costs and regulatory costs, after-tax -   3.5      
Adjusted diluted net income 45.6   42.5      
             
Adjusted Diluted EPS 1.28 (3)   1.18   +8.5%  
             
(1)  Gross profit means revenues less cost of sales.
(2)  2012 adjusted EBITDA means income before interest, tax, depreciation, amortization, regulatory legal contingency and related costs and restructuring costs.
(3)  Take into account the dilutive impact of the convertible debentures that are having an anti-dilutive effect under IFRS.

  

 

 

SOURCE: Atrium Innovations Inc.

For further information:

Investor Relations
Mario Paradis 
Vice President and Chief Financial Officer
Tel.: 418 652-1116
mp@atrium-innovations.com

Pierre Boucher
MaisonBrison Communications
Tel.: 514 731-0000, ext. 237
pierre@maisonbrison.com 

Media Relations:
Amélie Germain
Director of Communications
Tel.: 418 652-1116  
ag@atrium-innovations.com

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Atrium Innovations Inc.

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