Atrium Innovations Announces Financial Results for the Third Quarter of 2009
Company Delivers Record Quarterly Revenue and Net Earnings All amounts are in US dollars. </pre> <p/> <p><location>QUEBEC</location> CITY, <chron>Nov. 10</chron> /CNW Telbec/ - Atrium Innovations Inc. (TSX: ATB), a leading developer, manufacturer and marketer of science-based and professionally supported products for the Health and Nutrition industry, today announced its financial results for the third quarter of 2009.</p> <p/> <pre> Third quarter and recent highlights: - Atrium reported record quarterly revenue of $81.4 million; - The Company delivered EBITDA of $21.6 million and net earnings of $13.1 million, or $0.40 per diluted share; - Atrium generated $14 million in cash flows from operations before changes in working capital items, supporting a solid balance sheet; - Diluted earnings per share increased by 11% and branded organic growth was 9% in the quarter as compared to last year, excluding the negative impact from the euro conversion of our European businesses into US dollars; - On September 18, Atrium acquired Garden of Life, a leading formulator, distributor and marketer of nutritional supplement products sold in nearly 12,000 U.S. health food and specialty retail outlets; - Atrium became a member of the Council for Responsible Nutrition, the leading trade association committed to advocate for public policy based on sound science and consumer access to safe, beneficial, and high quality dietary supplement products. </pre> <p/> <p>During the third quarter ended <chron>September 30, 2009</chron>, Atrium recorded revenues of <money>$81.4 million</money>, a 16% increase compared to adjusted revenues of <money>$70.4 million</money> in the third quarter of 2008. This increase is mainly attributable to the acquisition of Nutri-Health at the end of 2008, AOV during 2008, the recent acquisition of Garden of Life and also to the branded business organic growth. Excluding the negative currency impact on converting the euro of the European business into US dollars as compared the 2008 rates, revenues would have increased by 18%. As expected, the CMO (contract manufacturing) business was softer in the third quarter of 2009 than in the third quarter last year. This was offset by 9% organic growth in the branded business.</p> <p>Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of 2009 were <money>$21.6 million</money> compared to <money>$19.0 million</money> for the same period in 2008. Net earnings from continuing operations for the third quarter of 2009 were <money>$13.1 million</money> or <money>$0.40</money> per diluted share, up 8% compared to <money>$12.1 million</money> or <money>$0.37</money> per diluted share in the third quarter of 2008. Excluding the negative currency conversion fluctuations, net earnings from continuing operations would have increased by 11%.</p> <p>"We continued to execute on our business plan both with our acquisition strategy and organic growth," said <person>Mr. Pierre Fitzgibbon</person>, President and Chief Executive Officer of Atrium Innovations. "We are already recognizing synergies from our acquisitions in terms of revenue expansion opportunities, vertical integration and product development. As we continue to implement a culture of cooperation, I am confident that we will be able to outperform the growth in our market and attract other successful entrepreneurs and their businesses to join the Atrium Group".</p> <p>For the nine-month period ended <chron>September 30, 2009</chron>, revenues were <money>$224.6 million</money>, up 12% from <money>$201.5 million</money> for the adjusted corresponding period in 2008. Excluding the negative currency fluctuations, revenues would have increased by 17%. EBITDA for the nine-month period ended <chron>September 30, 2009</chron> was <money>$57.8 million</money> compared to <money>$55.5 million</money> for the same period last year. For the nine-month period ended <chron>September 30, 2009</chron>, net earnings from continuing operations were <money>$ 34.9 million</money> or <money>$ 1.06</money> per diluted share compared to <money>$33.3 million</money> or <money>$1.01</money> per diluted share for the same period in 2008. Excluding the negative currency fluctuations, net earnings from continuing operations would have increased by 11%.</p> <p>For the third quarter of 2009, cash flows from continuing operating activities, before changes in non-cash working capital items, were stable at <money>$14 million</money> compared to <money>$13 million</money> for the corresponding period in 2008. For the nine-month period ended <chron>September 30, 2009</chron>, cash flows from continuing operating activities, before changes in non-cash working capital items, were <money>$37.6 million</money> compared to <money>$36.9 million</money> for the same period in 2008. As at <chron>September 30, 2009</chron>, the Company had a total debt amounting to <money>$181.3 million</money> and a cash balance of <money>$17.8 million</money>. The Company has a credit facility that provides <money>$300 million</money> of borrowing capacity. The credit facility matures only in 2012 and the Company is in compliance with all its financial covenants.</p> <p>"Even with the investment of <money>$35 million</money> for recent acquisition of Garden of Life, our financial position remains solid, with a net debt of <money>$163.5 million</money> and a ratio of net debt to pro forma EBITDA of slightly less than 2.0," said <person>Mario Paradis</person>, Chief Financial Officer of the Company. "We continued to generate solid free cash flow during the third quarter and we have the financial flexibility to continue growing our business through future acquisitions."</p> <p/> <p>New Website</p> <p/> <p>Atrium has recently re-launched its corporate website: <a href="http://www.atrium-innovations.com">www.atrium-innovations.com</a>. The new website provides an overview of Atrium and includes detailed information on all the brands in the Atrium family. The Company intends to use this new website as a way to advance its mission to help create a healthier quality of life, through innovation and scientifically-based nutritional supplements. Atrium's website emphasizes the Company's commitment to its customers' health, its passion for education on the science behind nutritional health and Atrium's vision to grow in health.</p> <p/> <p>About Atrium</p> <p/> <p>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 <location>North America</location> and <location>Europe</location>. Atrium has approximately 900 employees and operates seven manufacturing facilities. Additional information about Atrium is available on its website at <a href="http://www.atrium-innovations.com">www.atrium-innovations.com</a>.</p> <p/> <p>Conference Call and Webcast</p> <p/> <p>Atrium will hold its quarterly conference call and webcast to discuss its 2009 third quarter results on <chron>Wednesday, November 11, 2009</chron> at <chron>10:30 a.m. Eastern time</chron>. Participants may access the call by using the following numbers: 416-644-3416, 514-940-2795 or 800-733-7571. A live webcast is also available via the Company's website at <a href="http://www.atrium-innovations.com">www.atrium-innovations.com</a> 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.</p> <p/> <p>Caution Regarding Non-GAAP Measures</p> <p/> <p>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.</p> <p/> <p>Cautionary Note and Forward-Looking Statements</p> <p/> <p>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.</p> <p/> <p/> <pre> Atrium Innovations Inc. Financial Summary (unaudited) (in millions of US dollars except per share amounts) Consolidated Results for the quarter ended September 30, 2009 2008 Change -------- -------- -------- Revenues 81.4 75.4 Inter-co revenues following EAB acquisition - 5.0 -------- -------- Revenues (adjusted in 2008) 81.4 70.4 15.7% -------- -------- Gross Margin(1) 46.2 37.1 24.3% 56.7% 52.8% EBITDA(2) 21.6 19.0 13.7% 26.5% 27.0% Net earnings from continuing operations 13.1 12.1 8.3% Net earnings per share from continuing operations Basic 0.40 0.37 Diluted 0.40 0.37 Consolidated Results for the nine-month period ended September 30, 2009 2008 Change -------- -------- -------- Revenues 224.6 215.7 Inter-co revenues following EAB acquisition - 14.2 -------- -------- Revenues (adjusted in 2008) 224.6 201.5 11.5% -------- -------- Gross Margin(1) 124.2 109.9 13.1% 55.3% 54.5% EBITDA(2) 57.8 55.5 4.1% 25.7% 27.6% Net earnings from continuing operations 34.9 33.3 4.7% Net earnings per share from continuing operations Basic 1.07 1.03 Diluted 1.06 1.01 (1) Gross margin means sales less cost of goods sold. (2) EBITDA means earnings before interest, income taxes, depreciation and amortization. Atrium Innovations Inc. Interim Consolidated Balance Sheets (expressed in thousands of US DOLLARS) As at As at September 30, December 31, Unaudited 2009 2008 ------------------------------------------------------------------------- --------------------------- $ $ Assets Current assets Cash and cash equivalents 17,829 38,004 Accounts receivable 43,132 42,577 Income tax recoverable 1,902 2,143 Inventory 56,202 45,851 Prepaid expenses 3,368 2,200 Current receivable - 9,115 Future income tax assets 486 615 --------------------------- 122,919 140,505 Property, plant and equipment 17,514 15,593 Deferred charges and others 3,099 2,019 Financial instruments - 94 Intangible assets 219,167 186,192 Goodwill 240,576 209,379 Future income tax assets 8,561 4,858 --------------------------- 611,836 558,640 --------------------------- --------------------------- Liabilities Current liabilities Accounts payable and accrued liabilities 42,473 36,589 Income taxes 796 134 Deferred revenues 1,454 1,266 Current portion of long-term debt - 6 --------------------------- 44,723 37,995 Long-term debt 181,290 179,965 Deferred revenues 1,317 2,042 Financial instruments 2,475 - Future income tax liabilities 58,454 56,609 --------------------------- 288,259 276,611 --------------------------- Shareholders' Equity Share capital 92,256 89,756 Contributed surplus 2,220 1,940 Retained earnings 217,262 182,411 Accumulated other comprehensive income 11,839 7,922 --------------------------- 323,577 282,029 --------------------------- 611,836 558,640 --------------------------- --------------------------- Atrium Innovations Inc. Interim Consolidated Statements of Earnings (expressed in thousands of US DOLLARS, except share and per share data) Quarters ended Nine months ended September 30, September 30, -------------------- ------------------- Unaudited 2009 2008 2009 2008 ------------------------------------------------------------------------- ------------------------------------------- $ $ $ $ Revenues 81,393 75,421 224,626 215,739 ------------------------------------------------------------------------- Operating expenses Cost of sales 35,241 38,286 100,391 105,884 Selling and administrative expenses 24,735 18,378 66,696 54,785 Research and development costs 525 278 1,531 886 Depreciation and amortization Property, plant and equipement 364 249 814 725 Intangible assets 757 746 2,205 2,202 ------------------------------------------------------------------------- 61,622 57,937 171,637 164,482 ------------------------------------------------------------------------- Earnings from operations 19,771 17,484 52,989 51,257 ------------------------------------------------------------------------- Other revenues (expenses) Financial revenues 29 269 224 1,772 Financial expenses (1,765) (2,088) (5,522) (10,432) Foreign exchange gain (loss) (127) 744 (552) 1,838 ------------------------------------------------------------------------- (1,863) (1,075) (5,850) (6,822) ------------------------------------------------------------------------- Earnings before the following items 17,908 16,409 47,139 44,435 Income tax expense Current income tax expense 5,352 4,546 13,891 12,031 Future income tax benefit (515) (205) (1,603) (880) ------------------------------------------------------------------------- 4,837 4,341 12,288 11,151 ------------------------------------------------------------------------- Net earnings from continuing operations 13,071 12,068 34,851 33,284 Net earnings from discontinued operations - - - 37,361 ------------------------------------------------------------------------- Net earnings for the period 13,071 12,068 34,851 70,645 ------------------------------------------------------------------------- ------------------------------------------- Net earnings per share from continuing operations Basic 0.40 0.37 1.07 1.03 Diluted 0.40 0.37 1.06 1.01 Net earnings per share Basic 0.40 0.37 1.07 2.18 Diluted 0.40 0.37 1.06 2.14 Weighted average number of shares outstanding (000's) Basic 32,504 32,407 32,459 32,344 Diluted 33,023 32,972 32,986 33,039 Atrium Innovations Inc. Interim Consolidated Statements of Cash Flows (expressed in thousands of US DOLLARS) Quarters ended Nine months ended September 30, September 30, -------------------- ------------------- Unaudited 2009 2008 2009 2008 ------------------------------------------------------------------------- ------------------------------------------- $ $ $ $ Cash flows from operating activities Net earnings for the period 13,071 12,068 34,851 70,645 Net earnings for the period from discontinued operations - - - (37,361) ------------------------------------------------------------------------- Net earnings for the period from continuing operations 13,071 12,068 34,851 33,284 ------------------------------------------------------------------------- Items not affecting cash and cash equivalents Depreciation and amortization 1,792 1,488 4,815 4,290 Deferred charges 159 134 443 696 Deferred revenues (566) (450) (1,148) (245) Gain on derivative financial instruments - (40) - (810) Stock-based compensation costs 74 138 280 544 Future income taxes (515) (205) (1,603) (880) Foreign exchange gain on long-term items denominated in foreign currency - (163) - (12) Change in non-cash operating working capital items 6,252 (1,437) 3,712 (29,156) ------------------------------------------------------------------------- Cash flows from continuing operating activities 20,267 11,533 41,350 7,711 Cash flows from discontinued operating activities - - - 13,270 ------------------------------------------------------------------------- Cash flows from operating activities 20,267 11,533 41,350 20,981 ------------------------------------------------------------------------- Cash flows from financing activities Increase in long-term debt 23,803 11,388 77,384 35,080 Payments on long-term debt (8,029) (3,945) (85,756) (183,769) Deferred financing costs (46) (56) (209) (916) Issuance of shares, net of share issue expenses and related income tax - - - 4,748 Proceeds from the sale of derivative financial instruments - - - 755 ------------------------------------------------------------------------- Cash flows from continuing financing activities 15,728 7,387 (8,581) (144,102) ------------------------------------------------------------------------- Cash flows from investing activities Business acquisitions, net of cash and cash equivalents acquired (34,513) (10,332) (51,420) (34,471) Purchase of property, plant and equipment (630) (1,005) (2,425) (2,320) Acquisition of intangible assets (31) (5) (324) (53) ------------------------------------------------------------------------- Cash flows from continuing investing activities (35,174) (11,342) (54,169) (36,844) Cash flows from discontinued investing activities - - - 142,690 ------------------------------------------------------------------------- Cash flows from investing activities (35,174) (11,342) (54,169) 105,846 ------------------------------------------------------------------------- Net change in cash and cash equivalent 821 7,578 (21,400) (17,275) Effect of exchange rate changes on cash and cash equivalents 827 (1,760) 1,225 (1,755) ------------------------------------------------------------------------- Increase (decrease) in cash and cash equivalents 1,648 5,818 (20,175) (19,030) Cash and cash equivalents - beginning balance 16,181 20,005 38,004 44,853 ------------------------------------------------------------------------- Cash and cash equivalents - ending balance 17,829 25,823 17,829 25,823 ------------------------------------------------------------------------- ------------------------------------------- To view Atrium Innovations Inc. Waterfall Summary charts please click here: http://files.newswire.ca/815/Atrium-ENG.pdf
For further information: Investor Relations: Mario Paradis, Vice President and Chief Financial Officer, (418) 652-1116, [email protected]; Media Relations, Frédéric Tremblay, Edelman, (514) 844-6665, ext. 231, [email protected]
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