Atrium Innovations Announces First Quarter Financial Results of 2010
Solid Performance with Particular Strength in the U.S.
QUEBEC CITY, May 10 /CNW Telbec/ - Atrium Innovations Inc. (TSX: ATB), a recognized leading developer, manufacturer and marketer of professionally endorsed, science-based products for the health and nutrition industry, today released its financial results for the first quarter of 2010.
First Quarter Highlights: (All amounts are in US dollars) - Revenue and EBITDA growth of 27.5% and 19.5% - Double digit growth of the U.S. branded business - EBITDA of $21.2 million or 23.5% of revenues - Net earnings of $13.0 million up 22.8% - EPS of $0.39, up from $0.32 last year - Acquisition of Trophic Canada, a leading manufacturer and distributor of nutritional supplements in the Canadian health food store market
"Our solid first quarter was driven by the effect of the acquisition of Garden of Life and the strong momentum of our branded businesses, particularly in the U.S. market. European market conditions remained generally stable," said Pierre Fitzgibbon, President and Chief Executive Officer. "The acquisition of Trophic Canada during the quarter added a leading brand to our portfolio and the missing component to spearhead a broader and more aggressive growth strategy to enhance our share of the Canadian market. The integration process is well underway and is progressing on schedule.
"Our worldwide deployment strategy for Wobenzym is progressing very well as evidenced by the revenue growth we experienced with our Wobenzym products in the U.S., the Central Eastern European countries, and recently Italy. However, total sales of Wobenzym decreased slightly due to the transition period in Germany where the shift to Wobenzym P has presented some challenges. We are confident that our multi-product strategy will maintain and widen the consumer appeal of Wobenzym."
"We expect continued growth in our U.S. branded business, supported by strong industry fundamentals. We have reached a point in the evolution of our business model where our revenues and operations are now well diversified," concluded Mr. Fitzgibbon.
For the first quarter ended March 31, 2010, Atrium recorded revenues of $90.1 million representing an increase of 27.5% compared to revenues of $70.6 million for the corresponding period in 2009. The increase is mainly attributable to the acquisition of Garden of Life, and to organic growth of branded product businesses. Excluding the positive impact of the euro/US dollar exchange rate when we compared to the corresponding period last year, revenues would have increased by 25.1%.
Gross profit for the first quarter was $51.6 million compared to $38.5 million for 2009, an increase of $13.1 million or 34.0%. The increase in gross profit is primarily attributable to the acquisition of Garden of Life and to organic growth. For the first quarter, gross margin increased from 54.5% in 2009 to 57.3% in 2010. The gross margin increased due to the more favorable business mix of revenues and the integration of our Berlin manufacturing plant.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the first quarter of 2010 increased by 19.5% to $21.2 million or 23.5% of revenue compared to $17.7 million or 25.1% of revenues for the same period in 2009. Excluding the impact of the euro/US dollar exchange rate, EBITDA would have increased by 16.6%.
Net earnings for the quarter were $13.0 million compared to $10.6 million in 2009, representing an increase of 22.8%. EPS for the quarter were $0.39 per diluted share compared to $0.32 per diluted share in 2009.
Cash flows from operating activities before changes in non-cash working capital items were $14.5 million in 2010, an increase of 24.2% compared to $11.6 million in 2009. As at March 31, 2010, the Company had a total debt of $185.2 million and a cash position of $10.5 million. The Company has a revolving credit facility that provides $300 million of borrowing capacity with no debt refinancing before July 2012.
About Atrium
Atrium Innovations Inc. is a globally recognized leader in the innovation, formulation, production and commercialization of science-based and professionally endorsed 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 925 employees and operates eight 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 2010 first quarter results on Tuesday, May 11, 2010 at 8:00 a.m., Eastern time. Participants may access the call by using the following numbers: 514 807-9895, 888 231-8191 or 647 427-7450. 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.
Attachments: Financial summary Balance sheet, results and cash flow statement Atrium Innovations Inc. Financial Summary (in millions of US dollars except per share amounts) Consolidated results for the quarters ended March 31, (unaudited) 2010 2009 Change --------- --------- --------- Revenues 90.1 70.6 27.5% --------- --------- Gross profit(1) 51.6 38.5 34.0% 57.3% 54.5% EBITDA(2) 21.2 17.7 19.5% 23.5% 25.1% Net earnings 13.0 10.6 22.8% Net earnings per share Basic 0.40 0.33 Diluted 0.39 0.32 (1) Gross profit means sales less cost of goods sold. (2) EBITDA means earnings before interest, income taxes, depreciation and amortization. Atrium Innovations Inc. Consolidated Balance Sheets (expressed in thousands of US dollars) (unaudited) As at As at March 31, December 31, --------------------------- 2010 2009 $ $ Assets Current assets Cash and cash equivalents 10,522 17,167 Accounts receivable 44,299 45,100 Income taxes recoverable 5,767 4,904 Inventory 62,980 58,738 Prepaid expenses 3,663 2,045 Future income tax assets 659 741 ------------- ------------- 127,890 128,695 Property, plant and equipment 20,867 17,268 Deferred charges and others 2,998 3,050 Intangible assets 211,105 214,304 Goodwill 253,220 262,832 Future income tax assets 6,687 7,505 ------------- ------------- 622,767 633,654 ------------- ------------- ------------- ------------- Liabilities Current liabilities Accounts payable and accrued liabilities 34,582 43,160 Purchase price adjustment - 22,725 Income taxes 109 272 Deferred revenues 1,589 1,457 ------------- ------------- 36,280 67,614 Long-term debt 185,212 169,891 Future income tax liabilities 56,286 57,536 Deferred revenues 657 1,000 Derivative financial instruments 3,315 2,466 ------------- ------------- 281,750 298,507 ------------- ------------- Shareholders' Equity Share capital 92,356 92,300 Contributed surplus 2,355 2,292 Retained earnings 244,072 231,081 Accumulated other comprehensive income 2,234 9,474 ------------- ------------- 341,017 335,147 ------------- ------------- 622,767 633,654 ------------- ------------- ------------- ------------- Atrium Innovations Inc. Consolidated Statements of Earnings (tabular amounts in thousands of US dollars, except share and per share data) (unaudited) Quarters Ended March 31, --------------------------- 2010 2009 $ $ Revenues 90,053 70,603 ------------- ------------- Operating expenses Cost of sales (including depreciation of $509,000; $523,000 in 2009) 38,456 32,097 Selling and administrative expenses 30,358 20,766 Research and development costs 558 534 Depreciation and amortization Property, plant and equipment 309 233 Intangible assets 610 715 ------------- ------------- 70,291 54,345 ------------- ------------- Earnings from operations 19,762 16,258 ------------- ------------- Other revenues (expenses) Financial income 221 154 Financial expenses (1,674) (1,943) Foreign exchange loss (45) (170) ------------- ------------- (1,498) (1,959) ------------- ------------- Earnings before the following items 18,264 14,299 Income tax expense 5,273 3,717 ------------- ------------- Net earnings of the period 12,991 10,582 ------------- ------------- ------------- ------------- Net earnings per share Basic 0.40 0.33 ------------- ------------- ------------- ------------- Diluted 0.39 0.32 ------------- ------------- ------------- ------------- Weighted average number of shares outstanding (000's) Basic 32,667 32,436 ------------- ------------- ------------- ------------- Diluted 33,209 32,974 ------------- ------------- ------------- ------------- Atrium Innovations Inc. Consolidated Statements of Cash Flows (expressed in thousands of US dollars) (unaudited) Quarters Ended March 31, --------------------------- 2010 2009 $ $ Cash flows from operating activities Net earnings of the period 12,991 10,582 Items not affecting cash and cash equivalents Depreciation and amortization 1,428 1,471 Deferred charges 177 142 Deferred revenues (273) (282) Stock-based compensation costs 71 98 Future income taxes 78 (363) Change in non-cash operating working capital items (14,863) (8,001) ------------- ------------- Cash flows from operating activities (391) 3,647 ------------- ------------- Cash flows from financing activities Increase in long-term debt 24,513 52,826 Payments on long-term debt (1,370) (53,317) Issuance of shares 48 - Deferred financing costs (33) (10) ------------- ------------- Cash flows from financing activities 23,158 (501) ------------- ------------- Cash flows from investing activities Business acquisitions, net of cash and cash equivalents acquired (27,927) (18,098) Purchase of property, plant and equipment (796) (759) Acquisition of intangible assets (157) (219) ------------- ------------- Cash flows from investing activities (28,880) (19,076) ------------- ------------- Net change of cash and cash equivalents (6,113) (15,930) Effect of exchange rate changes on cash and cash equivalents (532) (654) ------------- ------------- Decrease in cash and cash equivalents (6,645) (16,584) Cash and cash equivalents - Beginning of the period 17,167 38,004 ------------- ------------- Cash and cash equivalents - End of the period 10,522 21,420 ------------- ------------- ------------- -------------
For further information: Investor Relations: Mario Paradis, Vice President and Chief Financial Officer, (418) 652-1116, [email protected]; Pierre Boucher, MaisonBrison, (514) 731-0000, ext. 237, [email protected]; Media Relations: Frédéric Tremblay, Edelman, (514) 844-6665, ext. 231, [email protected]
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