Atrium Innovations Announces Financial Results for the Second Quarter of 2009



    
       Company Delivers Continued Organic Growth in EBITDA and Net Earnings

    All amounts are in US dollars.
    

    QUEBEC CITY, Aug. 11 /CNW Telbec/ - Atrium Innovations Inc. (TSX: ATB), a
leading developer, manufacturer and marketer of science-based and
professionally supported products for the Health and Nutrition industry, today
announced its financial results for the second quarter of 2009.

    
    Second quarter highlights:

    - Sales were US$72.6 million;
    - EBITDA was US$18.5 million and net earnings of US$11.2 million, or
      US$0.34 per diluted share;
    - Cash flows from operations of $17.4 million supporting a solid balance
      sheet and acquisition strategy;
    - The Company completed the integration of EAB manufacturing facility
      into Mucos in Germany.
    - Excluding the negative impact from the Euro conversion of our European
      businesses into US dollars, our diluted earnings per share increased by
      14% while our branded organic growth was 7% in the quarter.
    

    During the second quarter ended June 30, 2009, Atrium recorded revenues
of $72.6 million, a 4% increase compared to adjusted revenues of $70.0 million
in the second quarter of 2008. This increase is mainly attributable to the
acquisition of Nutri-Health at the end of 2008 and AOV during 2008 and to the
branded business organic growth. Excluding the negative currency impact on
converting the euro of our European business into US dollars, revenues would
have increased by 10%. Earnings before interest, taxes, depreciation and
amortization (EBITDA) for the second quarter of 2009 were $18.5 million
compared to $18.2 million for the same period in 2008. Net earnings from
continuing operations for the second quarter of 2009 were $11.2 million or
$0.34 per diluted share, up 5% compared to $10.7 million or $0.32 per diluted
share in the second quarter of 2008. Excluding the negative currency
conversion fluctuations, net earnings from continuing operations would have
increased by 14%.
    In the quarter, as expected the CMO (contract manufacturing) business was
softer than the record quarter last year. This was compensated by the branded
business organic growth of slightly above 7%.
    "We continue to deliver top and bottom line growth, despite a challenging
operating environment," said Pierre Fitzgibbon, President and Chief Executive
Officer of Atrium Innovations. "Our business strategy of acquiring
science-based products in distribution channels that support these offerings
is driving profitable, organic growth throughout our businesses demonstrating
resilience in economic downturn. Our Company is on strong footing to
capitalize on additional opportunities and is well positioned for continued
growth both organically and through acquisition."
    For the six-month period ended June 30, 2009, revenues were $143.2
million, up 9% from $131.1 million for the adjusted corresponding period in
2008. Excluding the negative currency fluctuations, revenues would have
increased by 16%. EBITDA for the first half of 2009 was $36.2 million compared
to $36.6 million for the same period last year. For the first half of 2009,
net earnings from continuing operations were $21.8 million or $0.66 per
diluted share compared to $21.2 million or $0.64 per diluted share for the
same period in 2008. Excluding the negative currency fluctuations, net
earnings from continuing operations would have increased by 11%.
    For the second quarter of 2009, cash flows from continuing operating
activities, before changes in non-cash working capital items, were stable at
$12.0 million compared to $12.2 million for the corresponding period in 2008.
For the six-month period ended June 30, 2009, cash flows from continuing
operating activities, before changes in non-cash working capital items, were
$23.6 million compared to $23.9 million for the same period in 2008. As at
June 30, 2009, the Company had a total debt amounting to $157.9 million and a
cash balance of $16.2 million. The Company has a credit facility that provides
$300 million of borrowing capacity. The credit facility matures only in 2012
and the Company is in compliance with all its financial covenants.

    About Atrium

    Atrium Innovations Inc. is a recognized leading developer, manufacturer
and marketer of science-based and professionally supported products for the
Health & Nutrition industry. The Company focuses primarily on growing segments
of the health and nutrition markets which are benefiting from the trends
towards healthy living and the ageing of the population. Atrium markets a
broad portfolio of finished products through its highly specialized sales and
marketing network in more than 35 countries, primarily in North America and
Europe. Atrium has over 800 employees and operates seven manufacturing
facilities. Additional information about Atrium is available on its website at
www.atrium-innovations.com.

    Conference Call and Webcast

    Atrium will hold its quarterly conference call and webcast to discuss its
2009 second quarter results on Wednesday, August 12, 2009 at 10:30 a.m.
Eastern time. Participants may access the call by using the following numbers:
416-644-3415, 514-807-8791 or 800-733-7560. A live webcast is also available
via the Company's website at www.atrium-innovations.com in the Investors
section. A replay of the webcast will also be available on our website for a
period of 30 days. A copy of Atrium's interim unaudited financial statements
will also be available on the Company's website.

    Caution Regarding Non-GAAP Measures

    This press release is based on reported earnings in accordance with
Canadian generally accepted accounting principles (GAAP). It is also based on
earnings before interest, income taxes, depreciation and amortization (EBITDA)
and gross margin. These measures do not have a standardized meaning prescribed
by GAAP; therefore, other issuers using these terms may calculate them
differently. Management believes that a significant portion of the users of
its Consolidated Financial Statements and MD&A analyze the Company's results
based on these performance measures.

    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,
necessarily involve risks and uncertainties that could cause actual results to
differ materially from those contemplated by these forward-looking statements.
The Company considers the assumptions on which these forward-looking
statements are based to be reasonable, 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. For additional information with respect
to these and other factors, see the Company's quarterly and annual filings
with the Canadian securities commissions. 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.

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

    Consolidated Results for the quarter ended June 30,

                                                   2009      2008    Change
                                                 -------   -------   --------
    Revenues                                       72.6      74.5
      Inter-co revenues following EAB
       acquisition                                    -       4.5
                                                 -------   -------
    Revenues (adjusted in 2008)                    72.6      70.0       3.7%
                                                 -------   -------

    Gross Margin(1)                                39.6      37.2       6.5%
                                                   54.5%     53.1%

    EBITDA(2)                                      18.5      18.2       1.8%
                                                   25.5%     26.0%

    Net earnings from continuing operations        11.2      10.7       4.7%

    Net earnings per share from continuing
     operations
      Basic                                        0.35      0.33
      Diluted                                      0.34      0.32



    Consolidated Results for the half year ended June 30,

                                                   2009      2008    Change
                                                 -------   -------

    Revenues                                      143.2     140.3
      Inter-co revenues following EAB
       acquisition                                    -       9.2
                                                 -------   -------
    Revenues (adjusted in 2008)                   143.2     131.1       9.3%
                                                 -------   -------

    Gross Margin(1)                                78.1      72.7       7.4%
                                                   54.5%     55.5%

    EBITDA(2)                                      36.2      36.6      -0.9%
                                                   25.3%     27.9%

    Net earnings from continuing operations        21.8      21.2       2.7%

    Net earnings per share from continuing
     operations
      Basic                                        0.67      0.66
      Diluted                                      0.66      0.64


    (1) Gross margin means sales less cost of goods sold.
    (2) EBITDA means earnings before interest, income taxes, depreciation and
        amortization.


    Atrium Innovations Inc.
    Interim Consolidated Balance Sheets
    (expressed in thousands of US DOLLARS)

                                                            As at     As at
                                                             June  December
                                                               30,       31,
    Unaudited                                                2009      2008
                                                         --------------------
    -------------------------------------------------------------------------
                                                                $         $
    Assets
    Current assets
    Cash and cash equivalents                              16,181    38,004
    Accounts receivable                                    38,249    42,577
    Income tax recoverable                                  2,114     2,143
    Inventory                                              50,075    45,851
    Prepaid expenses                                        2,697     2,200
    Current receivable                                          -     9,115
    Future income tax assets                                  524       615
                                                         --------------------
                                                          109,840   140,505

    Property, plant and equipment                          17,240    15,593
    Deferred charges and others                             3,043     2,019
    Financial instruments                                       -        94
    Intangible assets                                     185,255   186,192
    Goodwill                                              231,388   209,379
    Future income tax assets                                7,059     4,858
                                                         --------------------
                                                          553,825   558,640
                                                         --------------------
                                                         --------------------
    Liabilities
    Current liabilities
    Accounts payable and accrued liabilities               31,299    36,589
    Income taxes                                              807       134
    Deferred revenues                                       1,334     1,266
    Current portion of long-term debt                           -         6
                                                         --------------------
                                                           33,440    37,995

    Long-term debt                                        157,948   179,965
    Deferred revenues                                       1,521     2,042
    Financial instruments                                   1,804         -
    Future income tax liabilities                          56,796    56,609
                                                         --------------------
                                                          251,509   276,611
                                                         --------------------
    Shareholders' Equity
    Share capital                                          89,756    89,756
    Contributed surplus                                     2,146     1,940
    Retained earnings                                     204,191   182,411
    Accumulated other comprehensive income                  6,223     7,922
                                                         --------------------
                                                          302,316   282,029
                                                         --------------------
                                                          553,825   558,640
                                                         --------------------
                                                         --------------------


    Atrium Innovations Inc.
    Interim Consolidated Statements of Earnings
    (expressed in thousands of US DOLLARS, except share and per share data)

                                         Quarters ended    Six months ended
                                             June 30,            June 30,
                                     ------------------- --------------------
    Unaudited                            2009      2008      2009      2008
                                     ----------------------------------------
    -------------------------------------------------------------------------
                                            $         $         $         $
    Revenues                           72,630    74,544   143,233   140,318
    -------------------------------------------------------------------------
    Operating expenses
    Cost of sales                      33,053    37,393    65,150    67,598
    Selling and administrative
     expenses                          21,195    19,102    41,961    36,407
    Research and development costs        472       322     1,006       608
    Depreciation and amortization
      Property, plant and equipement      217       247       450       476
      Intangible assets                   733       735     1,448     1,456
    -------------------------------------------------------------------------
                                       55,670    57,799   110,015   106,545
    -------------------------------------------------------------------------
    Earnings from operations           16,960    16,745    33,218    33,773
    -------------------------------------------------------------------------

    Other revenues (expenses)
    Financial revenues                     41     1,083       195     1,503
    Financial expenses                 (1,814)   (3,978)   (3,757)   (8,344)
    Foreign exchange gain (loss)         (255)      320      (425)    1,094
    -------------------------------------------------------------------------
                                       (2,028)   (2,575)   (3,987)   (5,747)
    -------------------------------------------------------------------------
    Earnings before the following
     items                             14,932    14,170    29,231    28,026

    Income tax expense
      Current income tax expense        4,459     3,659     8,539     7,485
      Future income tax benefit          (725)     (180)   (1,088)     (675)
    -------------------------------------------------------------------------
                                        3,734     3,479     7,451     6,810
    -------------------------------------------------------------------------

    Net earnings from continuing
     operations                        11,198    10,691    21,780    21,216
    Net earnings from discontinued
     operations                             -    33,166         -    37,361
    -------------------------------------------------------------------------
    Net earnings for the period        11,198    43,857    21,780    58,577
    -------------------------------------------------------------------------
                                     ----------------------------------------

    Net earnings per share from
     continuing operations

    Basic                                0.35      0.33      0.67      0.66
    Diluted                              0.34      0.32      0.66      0.64

    Net earnings per share
    Basic                                0.35      1.36      0.67      1.81
    Diluted                              0.34      1.33      0.66      1.77

    Weighted average number of shares
     outstanding (000's)
    Basic                              32,436    32,362    32,436    32,313
    Diluted                            32,960    33,004    32,967    33,075


    Atrium Innovations Inc.
    Interim Consolidated Statements of Cash Flows
    (expressed in thousands of US DOLLARS)

                                         Quarters ended     Six months ended
                                             June 30,            June 30,
                                     ----------------------------------------
    Unaudited                            2009      2008      2009      2008
                                     ----------------------------------------
    -------------------------------------------------------------------------
                                            $         $         $         $

    Cash flows from operating
     activities
    Net earnings for the period        11,198    43,857    21,780    58,577
    Net earnings for the period
     from discontinued operations           -   (33,166)        -   (37,361)
    -------------------------------------------------------------------------
    Net earnings for the period
     from continuing operations        11,198    10,691    21,780    21,216
    -------------------------------------------------------------------------
    Items not affecting cash and
     cash equivalents
      Depreciation and amortization     1,552     1,446     3,023     2,802
      Deferred charges                    142       443       284       562
      Deferred revenues                  (300)      212      (582)      205
      Gain on derivative financial
       instruments                          -      (768)        -      (770)
      Stock-based compensation costs      108       222       206       406
      Future income taxes                (725)     (180)   (1,088)     (675)
    Foreign exchange loss on
     long-term items denominated in
     foreign currency                       -       178         -       151
    Change in non-cash operating
     working capital items              5,461   (14,951)   (2,540)  (27,719)
    -------------------------------------------------------------------------
      Cash flows from continuing
       operating activities            17,436    (2,707)   21,083    (3,822)
      Cash flows from discontinued
       operating activities                 -    12,501         -    13,270
    -------------------------------------------------------------------------
      Cash flows from operating
       activities                      17,436     9,794    21,083     9,448
    -------------------------------------------------------------------------

    Cash flows from financing
     activities
    Increase in long-term debt            755         -    53,581    23,692
    Payments on long-term debt        (24,410) (178,442)  (77,727) (179,824)
    Deferred financing costs             (153)     (527)     (163)     (860)
    Issuance of shares, net of share
     issue expenses and related
     income tax                             -       447         -     4,748
    Proceeds from the sale of
     derivative financial instruments       -       755         -       755
    -------------------------------------------------------------------------
    Cash flows from continuing
     financing activities             (23,808) (177,767)  (24,309) (151,489)
    -------------------------------------------------------------------------

    Cash flows from investing
     activities
    Business acquisitions, net of
     cash and cash equivalents
     acquired                           1,191      (141)  (16,907)  (24,139)
    Purchase of property, plant and
     equipment                         (1,036)   (1,018)   (1,795)   (1,315)
    Acquisition of intangible assets      (74)      (43)     (293)      (48)
    -------------------------------------------------------------------------
    Cash flows from continuing
     investing activities                  81    (1,202)  (18,995)  (25,502)
    Cash flows from discontinued
     investing activities                   -   143,655         -   142,690
    -------------------------------------------------------------------------
    Cash flows from investing
     activities                            81   142,453   (18,995)  117,188
    -------------------------------------------------------------------------

    Net change in cash and cash
     equivalent                        (6,291)  (25,520)  (22,221)  (24,853)

    Effect of exchange rate changes
     on cash and cash equivalents       1,052    (2,301)      398         5
    -------------------------------------------------------------------------

    Decrease in cash and cash
     equivalents                       (5,239)  (27,821)  (21,823)  (24,848)

    Cash and cash equivalents -
     beginning balance                 21,420    47,826    38,004    44,853
    -------------------------------------------------------------------------

    Cash and cash equivalents -
     ending balance                    16,181    20,005    16,181    20,005
                                      ---------------------------------------
    -------------------------------------------------------------------------

    To view Atrium Innovations Inc. Waterfall Summary charts please click
    here: http://files.newswire.ca/815/Waterfall.pdf
    




For further information:

For further information: Investor Relations: Mario Paradis, Vice
President and Chief Financial Officer, (418) 652-1116,
mp@atrium-innovations.com; Media Relations: Frédéric Tremblay, (514) 844-6665,
ext. 231

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