Atrium Innovations Announces Second Quarter Financial Results of 2010
Sustained Growth and Solid Momentum of Branded Products
QUEBEC CITY, Aug. 12 /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 second quarter of 2010.
Second Quarter Highlights:
(All amounts are in US dollars.)
- Revenue and EBITDA growth of 17.3% and 9.6%
- EBITDA of $20.3 million or 23.8% of revenues
- Net earnings of $12.5 million up 11.4%
- EPS diluted of $0.38, up from $0.34 last year
"The acquisitions of Garden of Life and Trophic Canada combined with growth of branded products of 9.7%, excluding Germany, were the main contributors to revenue growth," said Pierre Fitzgibbon, President & CEO. "During the quarter, we successfully completed the integration of Trophic and started to leverage our Canadian distribution channel with health food and specialized stores.
"Sales of the Wobenzym family of products in Germany remained challenging during the quarter. However, the situation improved in the latter part of the quarter with the introduction of two new complementary products. Early into the third quarter, we are satisfied by sales progress of Wobenzym products and the run rate of the new products introduced.
"Industry fundamentals remain solid and we continue to assess multiple opportunities for acquisitions. For the third quarter, we expect moderate sequential revenue growth over the second quarter reflecting some seasonality," concluded Mr. Fitzgibbon
For the second quarter ended June 30, 2010, Atrium recorded revenues of $85.2 million representing an increase of 17.3% compared to revenues of $72,6 million for the corresponding period in 2009. The increase is mainly attributable to the acquisitions of Garden of Life and Trophic. Excluding the negative impact of the euro/US dollar exchange rate when compared to the corresponding period last year, revenues would have increased by 19.6%.
Gross profit for the second quarter was $48.9 million compared to $39.6 million for 2009, an increase of $9.3 million or 23.4%. The increase in gross profit is primarily attributable to the acquisitions of Garden of Life and Trophic. For the second 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 facility.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the second quarter of 2010 increased by 9.6% to $20.3 million or 23.8% of revenues compared to $18.5 million or 25.5% of revenues for the same period in 2009. This EBITDA increase came primarily from a higher gross profit partially offset by the increase of SG&A expenses related to new distribution channels requiring higher levels of sales & marketing expenses. Excluding the impact of the euro/US dollar exchange rate, EBITDA would have increased by 12.5%.
Net earnings for the quarter were $12.5 million compared to $11.2 million in 2009, representing an increase of 11.4%. EPS for the quarter were $0.38 per diluted share compared to $0.34 per diluted share in 2009.
Cash flows from operating activities before changes in non-cash working capital items were $13.8 million in 2010, an increase of 15.6% compared to $12.0 million in 2009. As at June 30, 2010, the Company had a total debt of $161.7 million and a cash position of $11.0 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 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 2010 second quarter results on Friday, August 13, 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 (unaudited)
(in millions of US dollars except per share amounts)
Consolidated results for the quarters ended June 30,
2010 2009 Change
-------- -------- --------
Revenues 85.2 72.6 17.3%
-------- --------
Gross profit(1) 48.9 39.6 23.4%
57.3% 54.5%
EBITDA(2) 20.3 18.5 9.6%
23.8% 25.5%
Net earnings 12.5 11.2 11.4%
Net earnings per share
Basic 0.38 0.35
Diluted 0.38 0.34 11.8%
Consolidated results for the six-month period ended June 30,
2010 2009 Change
-------- -------- --------
Revenues 175.2 143.2 22.3%
-------- --------
Gross profit(1) 100.4 78.1 28.6%
57.3% 54.5%
EBITDA(2) 41.5 36.2 14.4%
23.7% 25.3%
Net earnings 25.5 21.8 16.9%
Net earnings per share
Basic 0.78 0.67
Diluted 0.77 0.66 16.7%
(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
June 30, December 31,
------------ ------------
2010 2009
$ $
Assets
Current assets
Cash and cash equivalents 10,996 17,167
Accounts receivable 43,703 45,100
Income taxes recoverable 3,244 4,904
Inventory 63,789 58,738
Prepaid expenses 3,312 2,045
Future income tax assets 669 741
------------ ------------
125,713 128,695
Property, plant and equipment 19,710 17,268
Deferred charges and others 3,136 3,050
Intangible assets 200,183 214,304
Goodwill 241,053 262,832
Future income tax assets 5,667 7,505
------------ ------------
595,462 633,654
------------ ------------
------------ ------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 32,639 43,160
Purchase price adjustment - 22,725
Income taxes 133 272
Deferred revenues 1,550 1,457
------------ ------------
34,322 67,614
Long-term debt 161,670 169,891
Future income tax liabilities 56,890 57,536
Deferred revenues 266 1,000
Derivative financial instruments 2,964 2,466
------------ ------------
256,112 298,507
------------ ------------
Shareholders' Equity
Share capital 92,356 92,300
Contributed surplus 2,429 2,292
Retained earnings 256,549 231,081
Accumulated other comprehensive income (11,984) 9,474
------------ ------------
339,350 335,147
------------ ------------
595,462 633,654
------------ ------------
------------ ------------
Atrium Innovations Inc.
Consolidated Statements of Earnings
(tabular amounts in thousands of US dollars,
except share and per share data)
(unaudited)
Quarters Ended Six months ended
June 30, June 30,
------------------ ------------------
2010 2009 2010 2009
$ $ $ $
Revenues 85,183 72,630 175,236 143,233
Operating expenses
Cost of sales 36,332 33,053 74,788 65,150
Selling and administrative
expenses 28,669 21,195 59,027 41,961
Research and development costs 505 472 1,063 1,006
Depreciation and amortization
Property, plant and equipment 488 217 797 450
Intangible assets 668 733 1,278 1,448
-------- -------- -------- --------
66,662 55,670 136,953 110,015
-------- -------- -------- --------
Earnings from operations 18,521 16,960 38,283 33,218
-------- -------- -------- --------
Other revenues (expenses)
Financial income 40 41 261 195
Financial expenses (1,683) (1,814) (3,357) (3,757)
Foreign exchange gain (loss) 704 (255) 659 (425)
-------- -------- -------- --------
(939) (2,028) (2,437) (3,987)
-------- -------- -------- --------
Earnings before the following
items 17,582 14,932 35,846 29,231
Income tax expense 5,105 3,734 10,378 7,451
-------- -------- -------- --------
Net earnings of the period 12,477 11,198 25,468 21,780
-------- -------- -------- --------
-------- -------- -------- --------
Net earnings per share
Basic 0.38 0.35 0.78 0.67
-------- -------- -------- --------
-------- -------- -------- --------
Diluted 0.38 0.34 0.77 0.66
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average number of shares
outstanding (000's)
Basic 32,667 32,436 32,667 32,436
-------- -------- -------- --------
-------- -------- -------- --------
Diluted 33,197 32,960 33,203 32,967
-------- -------- -------- --------
-------- -------- -------- --------
Atrium Innovations Inc.
Consolidated Statements of Cash Flows
(expressed in thousands of US dollars)
(unaudited)
Quarters Ended Six months ended
June 30, June 30,
-------- -------- -------- --------
2010 2009 2010 2009
$ $ $ $
Cash flows from operating
activities
Net earnings of the period 12,477 11,198 25,468 21,780
Items not affecting cash and cash
equivalents
Depreciation and amortization 1,761 1,552 3,189 3,023
Deferred charges (247) 142 (70) 284
Deferred revenues (346) (300) (619) (582)
Stock-based compensation costs 74 108 145 206
Future income taxes 123 (725) 201 (1,088)
Change in non-cash operating
working capital items (4,617) 5,461 (19,480) (2,540)
-------- -------- -------- --------
Cash flows from operating
activities 9,225 17,436 8,834 21,083
-------- -------- -------- --------
Cash flows from financing
activities
Increase in long-term debt 1,434 755 25,947 53,581
Payments on long-term debt (8,188) (24,410) (9,558) (77,727)
Deferred financing costs (36) (153) (69) (163)
Issuance of shares - - 48 -
-------- -------- -------- --------
Cash flows from financing
activities (6,790) (23,808) 16,368 (24,309)
-------- -------- -------- --------
Cash flows from investing
activities
Business acquisitions, net
of cash and cash equivalents
acquired (341) 1,191 (28,268) (16,907)
Purchase of property, plant
and equipment (885) (1,036) (1,681) (1,795)
Acquisition of intangible
assets (94) (74) (251) (293)
-------- -------- -------- --------
Cash flows from investing
activities (1,320) 81 (30,200) (18,995)
-------- -------- -------- --------
Net change of cash and cash
equivalents 1,115 (6,291) (4,998) (22,221)
Effect of exchange rate
changes on cash and cash
equivalents (641) 1,052 (1,173) 398
-------- -------- -------- --------
Decrease (increase) in cash
and cash equivalents 474 (5,239) (6,171) (21,823)
Cash and cash equivalents -
Beginning of the period 10,522 21,420 17,167 38,004
-------- -------- -------- --------
Cash and cash equivalents -
End of the period 10,996 16,181 10,996 16,181
-------- -------- -------- --------
-------- -------- -------- --------
For further information: Investor Relations: Mario Paradis, Vice President and Chief Financial Officer, Tel.: 418 652-1116, [email protected]; Pierre Boucher, MaisonBrison Communications, Tel.: 514 731-0000, ext. 237, [email protected]; Media Relations: Amélie Germain, Director of Communications, Tel.: 418 652-1116, [email protected]
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