FOR IMMEDIATE RELEASE
Atrium Innovations Announces 2011 Fourth Quarter and Full Year Financial Results Continued Growth and Record Results in 2011 Quebec City (Quebec), February 29, 2012 - Atrium Innovations Inc. (TSX: ATB), a globally recognized leader in the development, manufacturing, and commercialization of innovative, science-based dietary supplements endorsed by health professionals, today released its 2011 full year and fourth quarter results for the period ended December 31, 2011. 2011 and Subsequent Year-End Highlights:(All amounts are in US dollars.)
• Revenue growth of 16.3% over previous year to reach $414.7 million
• EBITDA of $91.0 million or 21.9% of revenues, an increase of 8.5% compared to last year
• Adjusted diluted EPS of $1.70 for the year, an increase of 18.1% over last year
• Cash flows before working capital and interest were up 22.3% to $75.1 million
• Closing of CAN$100 million issue of 7-year convertible debentures
• Renewal of bank credit facility for a period of 3 years
• German Court ruled in favour of maintaining OTC drug status of Phlogenzym®
• US District Court ruled in favour of GOL in its proceeding against FTC
"We are generally pleased with Atrium's results in 2011 which
have reached record levels. Our branded business performed
particularly well in the U.S. in both the Healthcare
Practitioner and Health Food Store markets. We completed the
restructuring of our Direct to Consumer business, an
important component for our organic growth going forward. Our
Canadian and Dutch operations expanded modestly as growth in
those respective markets was restrained in
2011. Last December, in Germany, the Federal Administrative
Court ruled in favour of maintaining the OTC drug status of
Phlogenzym®, part of the Wobenzym family of products. As
a result, more marketing emphasis will be placed on our
animal enzymes OTC drug product
going forward. We have stabilized our revenue base in Germany
and are confident that we can
gradually rebuild from the current level with this recent
decision" said President and Chief
Executive Officer, Pierre Fitzgibbon.
"2011 proved to be a year of important changes for Atrium.
After completing a series of strategic acquisitions in the
last few years, the time was right to alter our management
structure and thereby optimize our business platform with
increased emphasis on organic growth. We appointed a Head of
Operations in both North America and Europe, and welcomed new
corporate executives. This team will provide us with a
structure precisely tailored to maximize our synergies and
build an effective platform. Atrium's new ERP system
implementation will be central to the new platform in North
America. In this era of enhanced regulation, Atrium is
advantageously positioned to reap the benefits of an industry
which is increasingly gaining legitimacy and credibility,"
concluded Mr. Fitzgibbon.
For the fiscal year ended December 31, 2011, Atrium recorded
revenues of $414.7 million representing an increase of 16.3%
compared to revenues of $356.6 million in 2010. This increase
is mainly attributable to the acquisition of Seroyal, as well
as to organic growth of North American branded business and
to the favourable impact of exchange rates.
EBITDA increased by 8.5% to $91.0 million or 21.9% of
revenues compared to $83.9 million or
23.5% of revenues for the same period in 2010. This EBITDA
increase came largely from the acquisition of Seroyal.
Net earnings attributable to shareholders were $55.9 million
in 2011 compared to $47.9 million in
2010, representing an increase of 16.7%. Net earnings per
share ("EPS") on diluted basis rose to $1.61 per share, as
compared to $1.44 per share for the same period in 2010.
Without giving
the dilutive effect of the potential conversion of the
convertible debentures, the adjusted diluted
EPS would have been $1.70 in 2011 compared to diluted EPS of
$1.44 in 2010.
Cash flows from operating activities before changes in
non-cash working capital items and interest expenses were
$75.1 million, an increase of 22.3% compared to $61.4 million
in 2010. As at December 31, 2011, the Company had a total
debt of $283.3 million and a cash position of
$22.8 million. During the year, the Company announced the
closing of a 7-year convertible debenture offering of CAN$100
million. The net proceeds were used to reduce the Company's
outstanding indebtedness.
During the year, primarily under its NCIB (Normal Course
Issuer Bid) program, the Company repurchased and cancelled
697,794 common shares for a total consideration of $9.3
million (401,386 common shares and $4.8 million in the fourth
quarter of 2011). Furthermore, 79,510 shares were repurchased
in January 2012.
"In 2011, we increased our financial flexibility and further
optimized our capital structure via a convertible debenture
financing and a new bank credit facility in place for a
period of three years. In addition, considering our solid
cash flow, we continue to repurchase our shares at levels
which we consider very attractive for the long-term benefit
of our shareholders," said Mario Paradis, Vice President and
CFO.
For the fourth quarter ended December 31, 2011, Atrium
recorded revenues of $104.8 million representing an increase
of 13.3% compared to $92.5 million for the corresponding
period in
2010. The increase is mainly attributable to the acquisition
of Seroyal and to organic growth of branded products.
EBITDA for the fourth quarter of 2011 was $21.7 million or
20.7% of revenue compared to $21.2 million or 22.9% of
revenues for the same period in 2010. Net earnings
attributable to shareholders were $14.0 million in 2011
compared to $10.5 million in 2010, representing an increase
of 33.3%. EPS for the quarter was $0.37 per diluted share
compared to $0.31 per diluted share in 2010. Without giving
the dilutive effect of the potential conversion of the
convertible debentures, the adjusted diluted EPS would have
been $0.43 in 2011 compared to
$0.31 in 2010.
Cash flows from operating activities before changes in
non-cash working capital items and interest expenses were
$21.1 million in 2011 compared to $13.8 million in 2010.
Atrium Innovations Inc. is a globally recognized leader in the development, manufacturing , and commercialization of innovative, science-based dietary supplements endorsed by health professionals. The Company distributes its extensive portfolio of products mainly in the healthcare practitioner and health food and specialized store channels, with a primary focus in North America and Europe. Atrium is at the forefront of science, innovation and education in the dietary supplement industry. The Company has over 1,100 employees and operates eight manufacturing facilities. 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 2011 fourth quarter and full year results on
March 1, 2012 at 9:00 a.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). A live webcast is
also available via the Company's website at www.atrium-innovations.comin the News Center section. A replay of the
webcast will also be available on our website 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-IFRS Financial Measures
The Company provides non-IFRS financial measures (Gross profit*, EBIT*, EBITDA*, and Adjusted EPS*) as supplemental information regarding its operational performance. These non- IFRS 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 sales less cost of sales. EBIT means earnings before interest and tax. EBITDA means earnings before interest, tax, depreciation, amortization and acquisition costs.
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 for the fiscal year ended December 31, 2011 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.
Investor Relations: Media Relations:
Mario Paradis Amélie Germain
Vice President and Chief Financial Officer Director of
Communications
mp@atrium-innovations.com ag@atrium-innovations.com
Pierre Boucher
MaisonBrison Communications Tel.: 514 731-0000, ext. 237 pierre@maisonbrison.com
Attachments : Financial Summary
Balance sheet, results and cash flow statement
(in millions of US dollars except per share amounts)
Consolidated results for the year ended December 31,2011 | 2010 | Change | |
$ | $ | ||
Revenues | 414.7 | 356.6 | 16% |
Gross profit (1) | 224.9 | 203.0 | |
54.2% | 56.9% | ||
EBITDA (2) | 91.0 | 83.9 | 8% |
21.9% | 23.5% | ||
Net earnings attributable to shareholders | 55.9 | 47.9 | 17% |
Net earnings per share | |||
Diluted | 1.61 | 1.44 | 12% |
Adjusted diluted (3) | 1.70 | 1.44 | 18% |
Reconciliation to non IFRS Financial Data
Net earnings attributable to shareholders Acquisition-related costs and interest expenses for acquisition-related contingent liabilities(after-tax)
55.9 0.447.9
2.8
Net earnings 56.3 50.7 11% Net diluted earnings per share 1.62 1.53 6% Adjusted diluted earnings per share (3) 1.71 1.53 12%(1) Gross profit means sales less cost of goods sold.
(2) EBITDA means earnings before interest, taxes, depreciation, amortization and acquisition-related costs. (3) Without giving the dilutive effect of the convertible debentures.
Atrium Innovations Inc. Financial Summary (unaudited)(in millions of US dollars except per share amounts)
Consolidated results for the quarters ended December 31, 2011 2010 Change$
$
Revenues | 104.8 | 92.5 | 13% |
Gross profit (1) | 57.0 | 53.4 | |
54.4% | 57.7% | ||
EBITDA (2) | 21.7 | 21.2 | 2% |
20.7% | 22.9% | ||
Net earnings attributable to shareholders | 14.0 | 10.5 | 33% |
Net earnings per share | |||
Diluted | 0.37 | 0.31 | 19% |
Adjusted diluted (3) | 0.43 | 0.31 | 39% |
Reconciliation to non IFRS Financial Data
Net earnings attributable to shareholders Acquisition-related costs and interest expenses for acquisition-related contingent liabilities(after-tax)
14.0 0.210.5
2.9
Net earnings 14.2 13.4 6% Net diluted earnings per share 0.37 0.40 (8%) Adjusted diluted earnings per share (3) 0.43 0.40 8%(1) Gross profit means sales less cost of goods sold.
(2) EBITDA means earnings before interest, taxes, depreciation, amortization and acquisition-related costs. (3) Without giving the dilutive effect of the convertible debentures.
Atrium Innovations Inc. Consolidated Balance Sheets (Expressed in thousands of US dollars)Assets
2011
$
2010
$
Current assets
Cash 22,800 12,049
Accounts receivable 52,189 50,070
Income taxes recoverable 5,841 5,860
Inventory 93,250 79,243
Prepaid expenses 4,588 4,384
178,688 | 151,606 | |
Property, plant and equipment | 23,296 | 21,916 |
Deferred charges and others | 4,218 | 3,238 |
Intangible assets | 257,853 | 256,139 |
Goodwill | 356,275 | 357,199 |
Deferred tax assets 5,634 8,564
825,944 798,662
Liabilities Current liabilities | ||
Accounts payable and accrued liabilities | 44,122 | 39,768 |
Provision | - | 3,351 |
Contingent considerations | 15,234 | 17,583 |
Income taxes | 1,263 | 1,471 |
Deferred revenues | 157 | 944 |
Derivative financial instruments | 704 | - |
Current portion of long-term debt | 292 | 217 |
61,772 | 63,334 | |
Contingent considerations | 479 | 11,877 |
Long-term debt | 191,169 | 275,614 |
Convertible debentures | 91,819 | - |
Deferred revenues | 75 | 218 |
Derivative financial instruments | - | 2,256 |
Deferred tax liabilities 67,056 69,503
Equity412,370 422,802
Share capital 91,658 92,664
Stock options reserve 2,394 1,767
Retained earnings 337,201 288,607
Accumulated other comprehensive loss | (17,706) (6,576) |
413,547 376,462 | |
Non-controlling interest | 27 (602) |
413,574 375,860 | |
825,944 798,662 |
(tabular amounts in thousands of US dollars, except share and per share data)
Years ended December 31,
2011
$
2010
$
Revenues 414,660 356,630
Operating expenses
Cost of sales 189,737 153,602
Selling and administrative expenses 139,711 127,330
Research and development costs 2,623 2,021
332,071 282,953
Earnings from operations 82,589 73,677
Other revenues (expenses)
Financial revenues 569 451
Financial expenses (12,484) (7,343) Foreign exchange gain (loss) (394) 331
Change in fair value of embedded derivative 3,013 -
(9,296) (6,561)
Earnings before income taxes 73,293 67,116
Income tax expense 16,731 19,198
Net earnings for the year 56,562 47,918
Net earnings for the year attributable to
Shareholders 55,933 47,918
Non-controlling interest 629 -
Net earnings per share
Basic 1.71 1.47
Diluted 1.61 1.44
Weighted average number of shares outstanding (000's)
Basic 32,640 32,699
Diluted 34,600 33,208
Atrium Innovations Inc. Consolidated Statements of Cash Flows (expressed in thousands of US dollars)Cash flows from operating activities
2011
$
2010
$
Net earnings for the year 56,562 47,918
Adjustments for:
Depreciation and amortization 8,040 6,782
Deferred charges 998 329
Deferred revenues (946) (1,367) Change in fair value of embedded derivative (3,013) - Stock-based compensation costs 692 233
Interest expense 10,789 5,947
Deferred income taxes 1,968 1,536
Change in non-cash operating working capital items (17,833) (23,765)
Cash flows from operating activities 57,257 37,613
Cash flows from financing activities Increase in long-term debt | 243,818 | 139,936 |
Payments on long-term debt | (329,679) | (24,124) |
Proceed from the issuance of convertible debentures | 101,081 | - |
Financing costs | (5,829) | (370) |
Issuance of shares | 887 | 356 |
Shares redeemed and cancelled | (9,297) | - |
Interest paid (8,101) (5,029)
Cash flows from financing activities (7,120) 110,769
Cash flows from investing activities Business acquisitions, net of cash acquired | (20,515) | (144,837) |
Purchase of property, plant and equipment | (4,594) | (3,976) |
Additions to intangible assets | (11,046) (3,785) | |
Cash flows from investing activities | (36,155) (152,598) | |
13,982 (4,216) | ||
Effect of exchange rate changes on cash | (3,231) (902) | |
Increase (decrease) in cash | 10,751 (5,118) | |
Cash - Beginning balance | 12,049 17,167 | |
Cash - Ending balance | 22,800 12,049 |