Cangene announces highest-ever financial results for fiscal 2009 with net
income up 102% to $59.9 million or 86 cents per share
Readers are referred to the cautionary notes regarding Forward-looking
Information and non-GAAP Financial Measures at the end of this release
Listed TSX, Symbol: CNJ
Revenues for the year were
Net income for the year was
"Our strong financial performance in 2009 means we are well positioned with the cash resources to drive R&D and take advantage of investment opportunities. We are also increasingly focused on developing our commercial brands - our recent acquisition of the U.S. commercialization rights for HepaGam B(R) is a positive step in that strategy," said
An increase in net non-cash working capital balances and other assets related to operations of
The Company had
Readers are referred to the cautionary notes regarding Forward-looking Information and non-GAAP Financial Measures at the end of this release. Certain comparative figures in the following financial statements have been reclassified to conform to the current year's presentation.
Conference Call
Cangene will host a conference call to discuss these financial results on
A live audio webcast of the conference call will be available at www.cangene.com and www.newswire.ca. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived at the above web sites for 90 days.
Cangene Corporation
CONSOLIDATED BALANCE SHEETS
As at July 31
in thousands of Canadian dollars 2009 2008
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ASSETS
Current
Cash $ 56,131 $ 14,675
Accounts receivable 34,547 38,383
Inventories and contracts in progress 92,430 72,087
Income and other taxes recoverable 5,637 4,755
Future income taxes 8,231 -
Prepaid expenses and deposits 2,830 2,589
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Total current assets 199,806 132,489
Property, plant and equipment, net 98,411 98,648
Future income taxes - 2,212
Goodwill and intangible assets 41,514 40,514
Other assets 5,460 8,956
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$ 345,191 $ 282,819
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 27,948 $ 26,738
Income and other taxes payable 4,126 654
Current portion of deferred income 5,875 5,337
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Total current liabilities 37,949 32,729
Deferred income 9,906 5,765
Incentive plan liability 122 -
Future income taxes 5,522 5,705
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Total liabilities 53,499 44,199
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Shareholders' equity
Share capital 65,655 66,948
Contributed surplus 3,239 3,239
Accumulated other comprehensive loss (4,467) (4,467)
Retained earnings 227,265 172,900
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Total shareholders' equity 291,692 238,620
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$ 345,191 $ 282,819
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Cangene Corporation
CONSOLIDATED STATEMENTS OF INCOME, COMPREHENSIVE INCOME AND
RETAINED EARNINGS
Years ended July 31
in thousands of Canadian dollars except
share-related data 2009 2008
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Revenues
Product sales and services $ 177,790 $ 86,386
R&D services 51,882 71,779
Royalties 9,079 7,891
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238,751 166,056
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Cost of sales
Product sales and services 82,129 45,671
R&D services 36,697 42,672
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118,826 88,343
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Gross profit 119,925 77,713
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Expenses
Independent R&D 12,735 6,028
Selling, general and administrative 23,117 17,753
Amortization 12,979 12,449
Interest expense (income)
Short-term (41) 164
Long-term - 72
Foreign exchange gain (11,709) (360)
Gain from bargain purchase (3,470) -
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33,611 36,106
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Income before income taxes 86,314 41,607
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Income tax expense (recovery)
Current 26,241 16,206
Future 205 (4,224)
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26,446 11,982
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Net income and comprehensive income
for the year 59,868 29,625
Retained earnings, beginning of year 172,900 144,999
Purchase of common shares in excess of
average stated capital (5,503) (1,724)
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Retained earnings, end of year $ 227,265 $ 172,900
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Earnings per share
Basic and diluted $ 0.86 $ 0.42
Cangene Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended July 31
in thousands of Canadian dollars 2009 2008
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OPERATING ACTIVITIES
Net income for the year $ 59,868 $ 29,625
Add (deduct) items not involving cash:
Amortization 12,979 12,449
Deferred income 4,679 4,548
Gain from bargain purchase (3,470) -
Incentive plan liability 122 (226)
Future income tax expense (recovery) 205 (4,224)
Unrealized foreign exchange gain (4,340) (164)
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70,043 42,008
Net change in non-cash working capital balances
and other assets related to operations (9,452) (13,332)
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Cash provided by operating activities 60,591 28,676
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INVESTING ACTIVITIES
Acquisition, net (1,707) -
Purchase of property, plant and equipment, net (12,742) (7,526)
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Cash used in investing activities (14,449) (7,526)
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FINANCING ACTIVITIES
Decrease in bank indebtedness, net - (2,136)
Repayment of long-term debt - (2,748)
Shares repurchased for cancellation (6,796) (2,120)
Proceeds on exercise of stock options - 450
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Cash used in financing activities (6,796) (6,554)
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Effect of exchange rates on cash 2,110 79
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Net increase in cash during the year 41,456 14,675
Cash, beginning of year 14,675 -
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Cash, end of year $ 56,131 $ 14,675
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Interest paid $ 63 $ 403
Income taxes paid (received) $ 12,945 $ (7,806)
About Cangene Corporation
Cangene is one of Canada's largest and earliest biopharmaceutical companies. It was founded in 1984 and is headquartered in
Cangene is focused on developing therapeutics for infectious diseases, and the Company uses patented manufacturing processes to produce plasma-derived and recombinant therapeutic proteins. Cangene has five FDA and/or Health Canada-approved products. In addition, the Company has several more products in development at various stages. Three of Cangene's products have been accepted into the U.S. Strategic National Stockpile - botulism antitoxin, anthrax immune globulin and vaccinia immune globulin, a product used to counteract certain complications that may arise from smallpox vaccination.
Capitalizing on its drug manufacturing expertise, Cangene also operates a significant contract research and manufacturing business using its
"Cangene" and "HepaGam B" are trademarks belonging to Cangene
Corporation.
Forward-looking and risk information
The reader should be aware that Cangene's businesses are subject to risks and uncertainties that cannot be predicted or quantified; consequently, actual results may differ materially from past results and those expressed or implied by any forward-looking statements. Factors that could cause or contribute to such risks or uncertainties include, but are not limited to: the regulatory environment including the difficulty of predicting regulatory outcomes; changes in the value of the Canadian dollar; the Company's reliance on a small number of customers including government organizations; the demand for new products and the impact of competitive products, service and pricing; availability and cost of raw materials, especially the cost, availability and antibody concentration in plasma; fluctuations in operating results; government policies or actions; progress and cost of clinical trials; reliance on key strategic relationships; costs and possible development delays resulting from use of legal, regulatory or legislative strategies by the Company's competitors; uncertainty related to intellectual property protection and potential costs associated with its defence; the Company's exposure to lawsuits; and other matters beyond control of management. Risks and uncertainties are discussed more extensively in the MD&A section of the Company's most recent annual report and annual information form, which are available on the Company's website or on SEDAR at www.sedar.com.
Cautionary Note Regarding Non-GAAP Financial Measures
This news release may contain non-GAAP financial measures. Terms by which non-GAAP financial measures are identified include but are not limited to "net cash", "total assets", "sales" and other similar expressions. Non-GAAP financial measures are used to provide management and investors with additional measures of performance. However, non-GAAP financial measures do not have standard meanings prescribed by GAAP and are not directly comparable to similar measures used by other companies. Please refer to the appropriate reconciliations of these non-GAAP financial measures to measures prescribed by GAAP.
The preceding cautionary statements should be considered in connection with all written or oral statements, especially forward-looking statements, that are made by the Company or by persons acting on its behalf and in conjunction with its periodic filings with Securities Commissions, including those contained in the Company's news releases and most recently filed annual information form. Forward-looking statements can be identified by the use of words such as "expects", "plans", "will", "believes", "estimates", "intends", "may", "bodes" and other words of similar meaning (including negative and grammatical variations). Should known or unknown risks or uncertainties materialize, or should management's assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly make or update any forward-looking statements, except as required by applicable law.
%SEDAR: 00002351E
For further information: about Cangene Corporation, please contact Michael Graham at (204) 275-4040 or by email at [email protected]
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