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 ------------ ------------ ------------ ------------
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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