Atrium Innovations Announces 2013 Second Quarter Financial Results

Another Solid Quarter, Organic Growth Reaches 10%

QUEBEC CITY, Aug. 12, 2013 /CNW Telbec/ - Atrium Innovations Inc. (TSX: ATB) ("Atrium" or "the Company"), a globally recognized leader in the development, manufacturing and commercialization of innovative, science-based natural health products, today released its results for the quarter ended June 30, 2013.

Second Quarter 2013 Highlights:
(All amounts are in US dollars.)

• Revenue of $121.4 million, representing 10.9% year-over-year organic growth
• EBITDA of $23.7 million or 19.6% of revenue, an increase of 10.2% over last year
• Adjusted diluted EPS of $0.45 for the quarter, an increase of 21.6% over last year
• Record operating cash flows before changes in non-cash working capital of $22.8 million
• Total net debt reduced by $19.7 million year-to-date

"We are very pleased by our solid performance during the quarter. Organic revenue growth of 10.2%, excluding foreign exchange impact, reflects strength in the Retail, Healthcare Practitioner (HCP) and Private Label channels.  The EBITDA increase of 10.2% over last year and a margin of 19.6% was in line with our expectations and was supported by leveraging our extensive North American HCP platform," said Pierre Fitzgibbon, President and CEO.

"Operating cash flows before working capital reached a record level of $22.8 million for the quarter and enabled us to further reduce net debt by $10.1 million. Year-to-date, net debt was reduced by $19.7 million, further supporting our plan to deleverage the financial position.

"Notwithstanding our strong performance after six months, we continue to consider 5%-7% as a reasonable target for revenue growth going forward as we are optimizing our contract manufacturing business. In pursuing our rationalization program in North America, we remain very positive on our outlook which reflects our concerted efforts and strong execution of the past 18 months to improve organic growth and operating efficiencies," said Mr. Fitzgibbon.

For the quarter ended June 30, 2013, Atrium recorded revenues of $121.4 million, representing an increase of 10.9%, compared to revenues of $109.5 million in 2012. The increase was mainly driven by the solid performance of the North American Retail, Healthcare Practitioner as well as Private Label channels, with growth of 20.9%, 7.1% and 13.4%, respectively.

EBITDA for the quarter was $23.7 million or 19.6% of revenues compared to adjusted EBITDA of $21.5 million or 19.6% of revenues for the same period in 2012. The EBITDA increase of $2.2 million over last year is largely due to higher revenues.

Net income attributable to shareholders was $13.2 million in 2013 compared to $12.2 million in 2012, while adjusted earnings per share on a diluted basis was $0.45, compared to $0.37 for the same period in 2012. See table below for full details of reconciliation to the 2012 adjusted financial data.

Cash flows from operating activities before changes in non-cash working capital items and interests were $22.8 million compared to adjusted cash flows from operating activities before changes in non-cash working capital items and interests of $19.0 million in 2012.

During the quarter, under the NCIB (Normal Course Issuer Bid) program, the Company repurchased and cancelled 51,600 common shares for a total consideration of $0.7 million.

Appointment of A Global Head of Supply Chain and Technical Operations

Don Allen has been appointed in the newly created position of Global Head of Supply Chain and Technical Operations effective September 3rd, 2013. In his role, Mr. Allen will be responsible for all Atrium's manufacturing operations and supply chain activities. In his nearly 30 years career, Mr. Allen has held several senior positions in manufacturing operations mainly with pharmaceutical companies. "We are pleased to be able to bring on board an executive of Don's caliber and track record. His experience in the pharmaceutical industry will serve us well. Over the last twelve months we have been able to improve our manufacturing operations and absorb large increases in internal capacity demand. We are confident that Don will be able to build on what was accomplished and further improve our supply chain and manufacturing capabilities, a strategic comparative advantage that we want to capitalize on," concluded Mr. Fitzgibbon.

About Atrium Innovations

Atrium Innovations Inc. (TSX: ATB) is a globally recognized leader in the development, manufacturing, and commercialization of innovative, science-based natural health products which are distributed in more than 35 countries.  The Company owns healthcare practitioner and specialized retail product brands that are at the forefront of science, innovation and education.  Atrium has over 1,100 employees and operates seven manufacturing facilities complying with current Good Manufacturing Practices.  Additional information is available at www.atrium-innovations.com.

Conference Call and Webcast

Atrium will hold its quarterly conference call and webcast to discuss its 2013 second quarter results on August 12, 2013 at 4:30 p.m., Eastern Time.  Participants may access the call by using the following numbers: 514-807-9895 (Montreal area), 888-231-8191 (Toll Free) or 647-427-7450 (Toronto area and overseas). They may also access the live webcast via the Company's website at www.atrium-innovations.com in the Presentation & Events section of the News Center menu.  The replay of the webcast will also remain available for a period of 30 days. A copy of Atrium's financial statements will also be available on the Company's website.

Caution Regarding Non-GAAP Financial Measures

The Company provides non-GAAP financial measures (Gross profit*, EBIT*, EBITDA*, Adjusted EBITDA*, Adjusted net income*, Adjusted cash flows from operating activities* and Adjusted earnings per share ("EPS") *) as supplemental information regarding its operational performance.  These non-GAAP financial measures are directly derived from the Company's financial statements and are presented in a consistent manner.  The Company uses these measures for the purposes of evaluating its historical and prospective financial performance, as well as its performance relative to competitors.  These measures also help the Company to plan and forecast for future periods as well as to make operational and strategic decisions.  The Company believes that providing this information to investors, in addition to IFRS measures, allows them to see the Company's results through the eyes of management, and to better understand its historical and future financial performance.

The presentation of this additional information is not prepared in accordance with IFRS.  Therefore, the information may not necessarily be comparable to that of other companies and should be considered as a supplement to, not a substitute for, or superior to, the comparable measures calculated in accordance with IFRS.

* Gross profit means revenues less cost of sales. EBIT means net income excluding other revenues (expenses) and the income tax expense. EBITDA means the addition of EBIT and depreciation/amortization. Adjusted EBITDA means the addition of EBIT, depreciation and amortization, restructuring costs, goodwill impairment, regulatory legal contingencies and related legal costs, one-time ERP-related inventory adjustment and acquisition-related costs. Adjusted net income means the addition of net income attributable to shareholders and the after-tax amount of restructuring costs, acquisition-related costs, interest expenses for acquisition-related contingent liabilities, goodwill impairment, legal contingencies and related legal costs and one-time ERP-related inventory adjustment. Adjusted cash flows from operating activities is calculated using cash flows from operating activities before changes in non-cash working capital items less the impact of restructuring costs,  legal contingencies and related legal costs and one-time inventory adjustment net of taxes. Adjusted EPS are calculated using the adjusted net income. The adjusted diluted EPS also take into account the impact of the convertible debentures even if it is anti-dilutive under IFRS.

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, require the Company to make certain assumptions and necessarily involve known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements.  Forward-looking statements are not guarantees of performance. These forward-looking statements, including financial outlooks, may involve, but are not limited to, comments with respect to the Company's business or financial objectives, its strategies or future actions, its targets, expectations for financial condition or outlook for operations and future contingent payments.  Words such as "may", "will", "would", "could", "expect", believe", "plan", "anticipate", "intend", "estimate", "continue", or the negative or comparable terminology, as well as terms usually used in the future and the conditional, are intended to identify forward-looking statements.  Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. The Company considers theses assumptions to be reasonable based on information currently available to it, 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 and its business.

For additional information with respect to these and other factors and assumptions underlying the forward-looking statements made in this press release, see the Company's quarterly and annual Management Discussion and Analysis filed with the Canadian securities commissions.  The forward-looking information set forth herein reflects the Company's expectations as at the date of this press release and is subject to change after such date. 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

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

Consolidated results for the quarters ended June 30,

	2013 $		2012 $		Change
Revenues	121.4		109.5		+10.9%
Gross profit ^(1)	59.7		55.8
	49.1%		51.0%
EBITDA	23.7		21.5 ^(2)		+10.2%
	19.6%		19.6%
Net income attributable to shareholders	13.2		12.2
Diluted EPS	0.42		0.36
Reconciliation to non-GAAP Financial Data
Net income attributable to shareholders	13.2		12.2
Regulatory legal contingency and related costs, after-tax	-		0.1
Adjusted net income	13.2		12.3
Adjusted Diluted EPS	0.45 ^(3)		0.37		+21.6%

(1) Gross profit means revenues less cost of sales.
(2) 2012 adjusted EBITDA means income before interest, tax, depreciation, amortization and regulatory legal contingency and related costs.
(3) Take into account the dilutive impact of the convertible debentures.

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

Consolidated results for the six-month period ended June 30,

	2013 $		2012 $		Change
Revenues	240.9		219.4		+9.8%
Gross profit ^(1)	119.6		114.5
	49.7%		52.2%
EBITDA	47.2		44.4 ^(2)		+6.3%
	19.6%		20.3%
Net income attributable to shareholders	27.3		23.9
Diluted EPS	0.87		0.68
Reconciliation to non-GAAP Financial Data
Net income attributable to shareholders	27.3		23.9
Restructuring costs, after-tax	-		3.0
Interest expenses for acquisition-related contingent liabilities	-		0.2
Adjusted net income	27.3		27.1
Adjusted Diluted EPS	0.87		0.77		+13.0%

(1) Gross profit means revenues less cost of sales.
(2) 2012 adjusted EBITDA means income before interest, tax, depreciation, amortization, regulatory legal contingency and related costs and restructuring costs.

SOURCE: ATRIUM INNOVATIONS INC.

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