Atrium Innovations Announces Fourth Quarter and Annual Financial Results of
2009

Company Ends 2009 with its Best Quarter Ever

QUEBEC CITY, Feb. 24 /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 fourth quarter and annual results for the period ended December 31, 2009.

    
    2009 Highlights:
    (All amounts are in US dollars)

    - Revenue and EBITDA growth of 33.1% and 25.7% for the fourth quarter
    - Revenues for 2009 of $319.7 million, up 17.1%
    - EBITDA of $80.8 million and earnings per diluted share of $1.47 for the
      year
    - Successful implementation of our new multi-channel strategy expanding
      future growth opportunities
    - Completion of three strategic acquisitions, Nutri-Health, EAB and
      Garden of Life, representing an investment of over $83 million
    - Continued corporate-wide process to optimize and leverage
      cross-selling, marketing expertise, manufacturing efficiencies,
      purchasing power and scientific collaboration
    - Strong financial position to pursue acquisition program
    

"Atrium's excellent performance during a year of lingering recession demonstrates the momentum and resilience of our business model," said Pierre Fitzgibbon, President and Chief Executive Officer. "We have maintained our consistent record of solid results and strong cash flows of the past few quarters, which points to the durability of the markets we serve. More and more people are making dietary supplements their choice for a healthy future. This growing demand clearly validates the further expansion Atrium undertook in its multi-channel distribution strategy, as our acquisitions allowed us to enter the direct-to-consumer channel and health food stores. As a prominent global player in the nutritional supplement industry, we have every reason to believe that our continuing progress will result in both immediate and sustained benefits for our shareholders."

For the fiscal year ended December 31, 2009, Atrium recorded revenues of $319.7 million representing an increase of 17.1% compared to adjusted revenues of $272.9 million for the corresponding fiscal year in 2008. This increase is mainly attributable to the acquisitions of Nutri-Health Supplements and Garden of Life as well as to organic growth of branded products business. Excluding the impact on European operations of unfavourable exchange rates between the euro and the US dollar, revenue would have been higher by $6.6 million or 19.6% when compared to 2008.

EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 9.3% to $80.8 million or 25.3% of revenues compared to $73.9 million or 27.1% of adjusted revenues for the same period in 2008. Without the negative impact of euro/US dollar exchange rate, EBITDA would have increased by 12.6% to $83.2 million.

Net earnings were $48.7 million in 2009 compared to $44.5 million in 2008, representing an increase of 9.4%. Net earnings per share ("EPS") on a diluted basis rose to $1.47 per share, as compared to $1.35 per share for the same period in 2008.

Cash flows from operating activities before changes in non-cash working capital items were $53.9 million, an increase of 10.1% compared to $48.9 million in 2008. As at December 31, 2009, the Company had a total debt of $169.9 million and a cash position of $17.2 million. The Company has a revolving credit facility that provides $300 million of borrowing capacity with no debt refinancing before July 2012.

Financial Results for the Fourth Quarter of 2009

For the fourth quarter ended December 31, 2009, Atrium recorded revenues of $95.0 million representing an increase of 33.1% compared to adjusted revenues of $71.4 million for the corresponding period in 2008. This increase is mainly attributable to the acquisitions of Garden of Life and Nutri-Health Supplements, and to organic growth of branded products business. Excluding the positive impact of the variation in the euro/US dollar exchange rate, revenues would have increased by 27.5%.

EBITDA for the fourth quarter of 2009 increased by 25.2% to $23.0 million or 24.2% of revenue compared to $18.3 million or 25.7% of adjusted revenues for the same period in 2008. Excluding the impact of positive changes in euro/US dollar exchange rate, EBITDA would have increased by 20.0%.

Net earnings were $13.8 million in 2009 compared to $11.2 million in 2008, representing an increase of 23.3%. EPS for the quarter were $0.42 per diluted share compared $0.34 per diluted share in 2008.

Cash flows from operating activities before changes in non-cash working capital items, were $16.2 million in 2009, an increase of 35.2% compared to $12.0 million in 2008.

"We ended 2009 with a very solid quarter in terms of revenues and cash flow generation. Atrium therefore entered 2010 with strong momentum, and both the confidence and means to sustain its growth," said Mario Paradis, Chief Financial Officer of the Company. "With a net debt to EBITDA ratio of 1.8x on a pro forma basis and significant unused borrowing capacity, we have the financial flexibility to pursue our acquisition program. This program has established Atrium's industry leadership on two continents, and further acquisitions promise to strengthen and extend the position of our brands in the marketplace."

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 900 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 fourth quarter and full-year results on Thursday, February 25, 2010 at 10:30 a.m. Eastern time. Participants may access the call by using the following numbers: 647 427-7450, 514 807-9895 or 888 231-8191. 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 (unaudited)
             (in millions of US dollars except per share amounts)

    Consolidated results for the year ended December 31,

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

    Revenues                                319.7        290.1
      Inter-co revenues following EAB
       acquisition                              -         17.2
                                      ------------  -----------
    Revenues (adjusted in 2008)             319.7        272.9         17.1%
                                      ------------  -----------

    Gross profit (1)                        179.3        147.5         21.5%
                                             56.1%        54.1%

    EBITDA (2)                               80.8         73.9          9.3%
                                             25.3%        27.1%

    Net earnings                             48.7         44.5          9.4%

    Net earnings per share
      Basic                                  1.50         1.37
      Diluted                                1.47         1.35


    Consolidated results for the quarter ended December 31,

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

    Revenues                                 95.0         74.4
      Inter-co revenues following EAB
       acquisition                              -          3.0
                                       ------------ ------------
    Revenues (adjusted in 2008)              95.0         71.4         33.1%
                                       ------------ ------------

    Gross profit (1)                         55.0         37.7         46.1%
                                             57.9%        52.7%

    EBITDA (2)                               23.0         18.3         25.2%
                                             24.2%        25.7%

    Net earnings                             13.8         11.2         23.3%

    Net earnings per share
      Basic                                  0.42         0.35
      Diluted                                0.42         0.34

    (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)

                                                          As at December 31,
                                                    -------------------------
                                                          2009         2008
                                                             $            $
    Assets

    Current assets
    Cash and cash equivalents                           17,167       38,004
    Accounts receivable
      Trade                                             44,150       40,915
      Other                                                950        1,662
    Income taxes recoverable                             4,904        2,143
    Inventory                                           58,738       45,851
    Prepaid expenses                                     2,045        2,200
    Current receivable                                       -        9,115
    Future income tax assets                               741          615
                                                    ------------ ------------

                                                       128,695      140,505
    Property, plant and equipment                       17,268       15,593
    Deferred charges and others                          3,050        2,019
    Intangible assets                                  214,304      186,192
    Goodwill                                           262,832      209,379
    Future income tax assets                             7,505        4,858
    Derivative financial instrument                          -           94
                                                    ------------ ------------
                                                       633,654      558,640
                                                    ------------ ------------
                                                    ------------ ------------
    Liabilities

    Current liabilities
    Accounts payable and accrued liabilities            43,160       36,589
    Purchase price adjustment                           22,725            -
    Income taxes                                           272          134
    Deferred revenues                                    1,457        1,266
                                                    ------------ ------------
                                                        67,614       37,989
    Long-term debt                                     169,891      179,971
    Future income tax liabilities                       57,536       56,609
    Deferred revenues                                    1,000        2,042
    Derivative financial instruments                     2,466            -
                                                    ------------ ------------
                                                       298,507      276,611
                                                    ------------ ------------
    Shareholders' Equity
    Share capital                                       92,300       89,756
    Contributed surplus                                  2,292        1,940
    Retained earnings                                  231,081      182,411
    Accumulated other comprehensive income               9,474        7,922
                                                    ------------ ------------
                                                       335,147      282,029
                                                    ------------ ------------
                                                       633,654      558,640
                                                    ------------ ------------
                                                    ------------ ------------


                           Atrium Innovations Inc.
                     Consolidated Statements of Earnings
        (tabular amounts in thousands of US dollars, except share and per
                                 share data)

                                                    Years Ended December 31,
                                                    -------------------------

                                                          2009         2008
                                                             $            $

    Revenues                                           319,655      290,109
                                                    ------------ ------------

    Operating expenses
    Cost of sales (including depreciation of
     $2,266,000; $1,802,000 in 2008)                   140,405      142,592
    Selling and administrative expenses                 98,427       74,252
    Research and development costs                       2,330        1,182
    Depreciation and amortization
      Property, plant and equipment                      1,265          967
      Intangible assets                                  2,965        2,916
                                                    ------------ ------------

                                                       245,392      221,909
                                                    ------------ ------------

    Earnings from operations                            74,263       68,200
                                                    ------------ ------------

    Other revenues (expenses)
    Interest income                                        298          761
    Other income                                             -        1,255
    Financial expenses
      Interest on long-term debt                        (6,692)     (11,864)
      Other                                               (678)        (884)
    Foreign exchange gain (loss)                          (286)       1,793
                                                    ------------ ------------

                                                        (7,358)      (8,939)
                                                    ------------ ------------

    Earnings before the following items                 66,905       59,261

    Income tax expense                                  18,235       14,768
                                                    ------------ ------------

    Net earnings from continuing operations             48,670       44,493

    Net earnings from discontinued operations                -       36,779
                                                    ------------ ------------

    Net earnings for the year                           48,670       81,272
                                                    ------------ ------------
                                                    ------------ ------------

    Net earnings per share from continuing operations
    Basic                                                 1.50         1.37
                                                    ------------ ------------
                                                    ------------ ------------

    Diluted                                               1.47         1.35
                                                    ------------ ------------
                                                    ------------ ------------

    Net earnings per share
    Basic                                                 1.50         2.51
                                                    ------------ ------------
                                                    ------------ ------------

    Diluted                                               1.47         2.46
                                                    ------------ ------------
                                                    ------------ ------------

    Weighted average number of shares
     outstanding (000's)
    Basic                                               32,508       32,362
                                                    ------------ ------------
                                                    ------------ ------------

    Diluted                                             33,038       33,011
                                                    ------------ ------------
                                                    ------------ ------------


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

                                                    Years Ended December 31,
                                                    -------------------------

                                                          2009         2008
                                                             $            $
    Cash flows from operating activities
    Net earnings for the year                           48,670       81,272
    Net earnings from discontinued operations                -       36,779
                                                    ------------ ------------

    Net earnings from continuing operations             48,670       44,493

    Items not affecting cash and cash equivalents
      Depreciation and amortization                      6,496        5,685
      Deferred charges                                     616          822
      Deferred revenues                                 (1,509)        (522)
      Gain on derivative financial instrument                -         (817)
      Stock-based compensation costs                       352          647
      Foreign exchange gain on long-term item
       denominated in foreign currency                       -          (12)
      Future income taxes                                 (759)      (1,422)
    Change in non-cash operating working capital
     items                                              (2,542)     (33,967)
                                                    ------------ ------------

    Cash flows from continuing operating activities     51,324       14,907

    Cash flows from discontinued operating
     activities                                              -        9,952
                                                    ------------ ------------

                                                        51,324       24,859
                                                    ------------ ------------
    Cash flows from financing activities
    Increase in long-term debt                          78,448      121,864
    Payments on long-term debt                         (94,660)    (235,276)
    Issuance of shares                                      44        4,813
    Deferred financing costs                              (342)      (1,091)
    Proceeds from the sale of financial instruments          -          755
                                                    ------------ ------------

    Cash flows from continuing financing activities    (16,510)    (108,935)
                                                    ------------ ------------

    Cash flows from investing activities
    Business acquisitions, net of cash and cash
     equivalents acquired                              (52,813)     (58,522)
    Purchase of property, plant and equipment           (3,365)      (2,800)
    Acquisition of intangible assets                      (493)        (343)
                                                    ------------ ------------

    Cash flows from continuing investing
     activities                                        (56,671)     (61,665)

    Cash flows from discontinued investing
     activities                                              -      141,022
                                                    ------------ ------------

                                                       (56,671)      79,357
                                                    ------------ ------------

                                                      (21, 857)      (4,719)

    Effect of exchange rate changes on cash and
     cash equivalents                                    1,020       (2,130)
                                                    ------------ ------------

    Decrease in cash and cash equivalents              (20,837)      (6,849)

    Cash and cash equivalents - Beginning of year       38,004       44,853
                                                    ------------ ------------

    Cash and cash equivalents - End of year             17,167       38,004
                                                    ------------ ------------
                                                    ------------ ------------
    

SOURCE Atrium Innovations Inc.

For further information: For further information: Investor Relations: Mario Paradis, Vice President and Chief Financial Officer, (418) 652-1116, mp@atrium-innovations.com; Pierre Boucher, MaisonBrison, (514) 731-0000, ext. 237, pierre@maisonbrison.com; Media Relations: Frédéric Tremblay, Edelman, (514) 844-6665, ext. 231, frederic.tremblay@edelman.com

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