MONTREAL, March 24, 2022 (GLOBE NEWSWIRE) -- Knight Therapeutics Inc. (TSX: GUD) ("Knight" or “the Company”), a leading Pan-American (ex-US) specialty pharmaceutical company, today reported financial results for its fourth quarter and year ended December 31, 2021. All currency amounts are in thousands except for share and per share amounts. All currencies are Canadian unless otherwise specified.

2021 Highlights

Financials

  • Revenues were $243,478, an increase of $43,959 or 22% over prior year.
  • Gross margin of $115,412 or 47% compared to $81,690 or 41% in prior year.
  • Adjusted EBITDA1 was $38,005, an increase of $21,168 or 126% over prior year.
  • Net gain on financial assets measured at fair value through profit or loss of $18,944.
  • Net income was $15,675, compared to net income of $31,760 in prior year.
  • Cash inflow from operations was $44,618, compared to a cash outflow from operations of $12,205 in prior year.

Corporate Developments

  • Purchased 12,321,864 common shares through Knight’s Normal Course Issuer Bid ("NCIB") at an average price of $5.23 for an aggregate cash consideration of $64,415.
  • Performed leadership change with Samira Sakhia assuming role of CEO and Jonathan Goodman assuming role of Executive Chairman effective September 1, 2021.
  • Promoted Amal Khouri to Chief Business Officer.
  • Hired Jeff Martens as Global VP Commercial, Monica Percario as Global VP Scientific Affairs, Daniela Marino as Global VP Legal and Compliance and Susan Emblem as Global VP Human Resources.
  • Shareholders re-elected James C. Gale, Jonathan Ross Goodman, Samira Sakhia, Robert N. Lande, Michael J. Tremblay, Nicolás Sujoy and Janice Murray on the Board of Directors.

Products        

  • Acquired, in May 2021, the exclusive rights to manufacture, market and sell Exelon® (rivastigmine) in Canada and Latin America for an upfront and milestone payment of $217,331 [US$180,000].
  • Entered into exclusive supply and distribution agreement with Incyte for tafasitamab and pemigatinib for Latin America.
  • Launched Ibsrela® (tenapanor) in Canada for the treatment of irritable bowel syndrome with constipation ("IBS-C").
  • Obtained regulatory approval for NERLYNX® (neratinib) to treat subset of HER2-positive metastatic breast cancer patients in Canada.
  • Obtained regulatory approval for Halaven® (eribulin mesylate) injection to treat locally advanced or metastatic breast cancer in Colombia and to treat advanced or metastatic liposarcoma.
  • Obtained regulatory approval for Lenvima® (lenvatinib) to treat radioiodine refractory differentiated thyroid cancer (“RR-DTC”) and unresectable hepatocellular carcinoma (“u-HCC”) in Colombia.
  • Obtained regulatory approval of Rembre® (dasatinib) to treat chronic myeloid leukemia in Colombia.

1 Adjusted EBITDA is a non-GAPP measure, refer to the definitions below for additional details.

Strategic Investments

  • Disposed of 315,600 common shares of Medexus for total proceeds of $2,624 realizing a gain of $1,639.
  • Received distributions of $30,931 from strategic fund investments, including $10,906 (US$8,774) final distribution from the liquidation of NEMO II fund, and realized a gain of $16,644.

Subsequent Events

  • Launched Lenvima® and Rembre® in Colombia in February 2022.
  • Launched Halaven® in Colombia in March 2022.
  • Hired Leopoldo Bosano as VP Manufacturing and Operations in March 2022.
  • Purchased an additional 933,715 common shares through NCIB for an aggregate cash consideration of $4,997.

“I am excited to announce that 2021 was a record-setting year in Knight’s history, despite the ongoing challenges posed by the pandemic. During the year, we made significant strides towards completing the integration of the Grupo Biotoscana acquisition, all while strengthening the team and processes and driving strong performance.

As part of our integration activities, we completed the implementation of several key systems including, a global CRM, HR IS and a global pharmacovigilance system. In addition, we implemented ERP for 14 legal entities in 6 countries. We further strengthened Knight's management team with the addition of a Global VP Commercial, a Global VP Scientific Affairs, a Global VP Legal and Compliance and a Global VP Human Resources and most recently added a VP Manufacturing and Operations, to continue delivering on growth and operational excellence. Our business development team closed the acquisition of Exelon® and entered into an exclusive supply and distribution agreement with Incyte. Our regulatory team advanced our portfolio with the approval of Halaven®, Lenvima® and Rembre® in Colombia as well as the approval of Nerlynx®, while our commercial team continued to deliver on strong growth of our key brands.

It is thanks to the hard work of our employees that we achieved unprecedented results in 2021 and we are entering 2022 with a stronger platform that is well equipped to continue delivering on further growth and success.” said Samira Sakhia, President and Chief Executive Officer of Knight Therapeutics Inc.


SELECT FINANCIAL RESULTS REPORTED UNDER IFRS
[In thousands of Canadian dollars]

   Change  Change
 Q4-21 Q4-20 $1  %2 YTD-21YTD-20$1  %2 
         
Revenues58,273 55,191 3,082 6%243,478199,51943,959 22%
Gross margin28,195 20,060 8,135 41%115,41281,69033,722 41%
Operating expenses442,829 32,413 (10,416)32%128,244112,346(15,898)14%
Net (loss) income(8,301)8,233 (16,534)201%15,67531,760(16,085)51%
EBITDA34,101 (832)4,933 593%35,8657,76128,104 362%
Adjusted EBITDA35,696 1,771 3,925 222%38,00516,83721,168 126%
1 A positive variance represents a positive impact to net income (loss) and a negative variance represents a negative impact to net income (loss)
2 Percentage change is presented in absolute values
3 EBITDA and adjusted EBITDA are non-GAAP measures, refer to the definitions below for additional details
4 Operating expenses include selling and marketing expenses, general and administrative expenses, research and development expenses, amortization and impairment of intangible assets


SELECT FINANCIAL RESULTS AT CONSTANT CURRENCY
[In thousands of Canadian dollars]

 Q4-21Q4-20
 VarianceYTD-21YTD-20Variance
Excluding impact of IAS 293
 Constant
Currency3
 $1
 %2 Constant
Currency3		$1
 %2
         
Revenues56,35853,407 2,951 6%239,238190,40648,832 26%
Gross margin28,63421,705 6,929 32%118,82986,54132,288 37%
Operating expenses441,14831,756 (9,392)30%122,890106,920(15,970)15%
EBITDA34,101(1,193)5,294 444%35,8655,12230,743 600%
Adjusted EBITDA35,6961,354 4,342 321%38,00513,83624,169 175%
1 A positive variance represents a positive impact to adjusted EBITDA and a negative variance represents a negative impact to adjusted EBITDA
2 Percentage change is presented in absolute values
3 Financial results at constant currency and excluding impact of IAS 29, EBITDA and adjusted EBITDA are non-GAAP measures, refer to the definitions below for additional details
4 Operating expenses include selling and marketing expenses, general and administrative expenses, research and development expenses, amortization and impairment of intangible assets


SELECT BALANCE SHEET ITEMS
[In thousands of Canadian dollars]

   Change
 12-31-2112-31-20$%1
     
Cash, cash equivalents and marketable securities149,502392,225(242,723)62%
Trade and other receivables103,875116,510(12,635)11%
Inventory72,39756,50515,892 28%
Financial assets192,443193,955(1,512)1%
Accounts payable and accrued liabilities65,59044,82820,762 46%
Bank loans35,92751,770(15,843)31%
1 Percentage change is presented in absolute values


Revenues: For the quarter ended December 31, 2021 revenues increased by $3,082 or 6% compared to the same prior year period. On a constant currency basis, revenues increased by $2,951 or 6%. The growth in revenues on a constant currency basis is explained as following:      

  • An increase in revenues of $7,095 driven by the acquisition of Exelon®.
  • An increase in revenues of $1,612 or 13%, from $12,559 to $14,171, driven by the growth of our recently launched products, including Cresemba®, Lenvima®, Halaven®, Nerlynx®, Trelstar® and certain BGx products.
  • The increase in revenues in Q4-21 vs. Q4-20 was offset by the buying pattern on certain of our infectious disease’s products. It is estimated that approximately $3,200 to $4,200 of products purchased in Q3-21 was not utilized in that quarter and resulted in lower sales in Q4-21.

For the year ended December 31, 2021 revenues increased by $43,959 or 22% compared to the same prior year period. On a constant currency basis, revenues increased by $48,832 or 26%. The growth in revenues on a constant currency basis is explained as following:

  • An estimated increase in revenues of approximately $13,500 to $16,300 driven by the increased demand of certain of our infectious diseases products to treat invasive fungal infections associated with COVID-19.
  • An increase in revenues of $21,187 driven by the acquisition of Exelon®
  • An increase in revenues of $15,135 or 45%, from $33,897 to $49,032 driven by the growth of our recently launched products, including, Cresemba®, Lenvima®, Halaven®, Nerlynx®, Trelstar® and certain BGx products.

Gross margin: For the quarter and year ended December 31, 2021, gross margin increased from 36% to 48% and from 41% to 47% respectively, compared to the same period in prior year due to a change in product mix, the acquisition of Exelon® and related revenues recorded as a net profit transfer, lower inventory provision recorded offset by the re-negotiation of certain license agreements and the depreciation of the LATAM currencies. For the quarter and year ended December 31, 2021, the gross margin would have been 51%, an increase of 3%, from 48% and 50%, an increase of 3%, from 47%, after excluding the adjustment of hyperinflation accounting in accordance with IAS 29.

Selling and marketing: For the quarter ended December 31, 2021, selling and marketing increased by $1,773 or 20% and on a constant currency basis by $1,155 or 13% as compared to the same prior year period, driven by an increase in certain variable costs such as logistics fees and annual incentive compensation as well as an increase in selling and marketing activities related to key promoted products and Exelon®.

For the year ended December 31, 2021, selling and marketing expenses increased by $1,632 or 5% and on a constant currency basis by $1,801 or 5% as compared to the prior year. Excluding the non-recurring costs and the allowance for expected credit losses, selling and marketing expenses increased by $5,738 or 19%, from $30,052 to $35,790, due to an increase in certain variable costs such as logistics fees and annual incentive compensation as well as an increase in selling and marketing activities related to key promoted products and Exelon®.

General and administrative: For the year ended December 31, 2021, general and administrative expenses decreased by $1,686 or 4% and on a constant currency basis by $1,136 or 3% as compared to the same period in prior year. Excluding the non-recurring costs and acquisition costs including the Unified Tender Offer, general and administrative expenses for the year ended December 31, 2021, increased by $2,953 or 10%, from $30,914 to $33,867, driven by an expense of $1,210 related to the extension of the expiry date of certain stock options and an increase in cost related to the annual incentive compensation.

Amortization of intangible assets: For the quarter and year ended December 31, 2021, amortization of intangible assets increased by $9,051, or 113% and $15,641, or 61% respectively, mainly explained by the amortization of $5,731 and $13,686 related to Exelon®, the accelerated amortization of $5,435 related to the discontinuation of certain distribution agreements partially offset by the depreciation of LATAM currencies.

Interest income: Interest income is the sum of interest income on financial instruments measured at amortized cost and other interest income. For the quarter and year ended December 31, 2021, interest income was $2,196 and $7,382, a decrease of 22% or $611 and 48% or $6,940 respectively, compared to the same period in prior year due to a lower average cash and marketable securities balances and loan balance.

Interest expense: For the quarter ended December 31, 2021 interest expense was $1,331, an increase of $1,003 or 306%, compared to the same period in prior year due to higher interest rates.

For the year ended December 31, 2021 interest expense was $3,618, an increase of $220 or 6%, compared to prior year due to a decrease in the average loan balance outstanding largely offset by higher interest rates.

Adjusted EBITDA: For the quarter ended December 31, 2021 adjusted EBITDA increased by $3,925 or 222% and on a constant currency basis by $4,342 or 321% compared to Q4-20. The growth in adjusted EBITDA is driven by an increase in gross margin of $6,929 on a constant currency basis offset by an increase in operating expenses adjusted for non-recurring expenses.

For the year ended December 31, 2021 adjusted EBITDA increased by $21,168 or 126% and on a constant currency basis by $24,169 or 175% compared to the same prior year period. The growth in adjusted EBITDA is driven by an increase in gross margin of $32,288 on a constant currency basis due to the increase in revenues offset by an increase in operating expenses adjusted for acquisition and transaction costs as well as non-recurring expenses.

Net loss or income: For the quarter ended December 31, 2021, net loss was $8,301 compared to net income of $8,233 for the same period last year. The variance mainly resulted from the above-mentioned items and (1) an income tax recovery of $6,123 in the fourth quarter of 2021 due to the recognition of certain deferred tax assets compared to an income expense of $2,618 in the prior year period as well as (2) a lower net gain on the revaluation of financial assets measured at fair value through profit or loss of $2,300 in the fourth quarter of 2021 versus a net gain of $25,418 in the prior year period mainly due to unrealized losses and gains on revaluation of the strategic fund investments.

For the year ended December 31, 2021, net income was $15,675 compared to net income of $31,760 in prior year. The variance mainly resulted from the above-mentioned items and (1) an income tax recovery of $8,985 in 2021 due to the recognition of certain deferred tax assets compared to a prior year income tax expense of $325 as well as (2) as well as a lower net gain on the revaluation of financial assets measured at fair value through profit or loss of $18,944 in 2021 versus a net gain of $48,060 in prior year mainly due to unrealized losses and gains on revaluation of the strategic fund investments.

Cash, cash equivalents and marketable securities: As at December 31, 2021, Knight had $149,502 in cash, cash equivalents and marketable securities, a decrease of $242,723 or 62% as compared to December 31, 2020. The variance is primarily due to cash outflows related to the acquisition of Exelon®, the shares repurchased through NCIB and the repayments of bank loans offset by cash generated from operating activities and our strategic fund investments.

Financial assets: As at December 31, 2021, financial assets were at $192,443, a decrease of $1,512 or 1%, as compared to the prior year, mainly due to an increase of $19,329 due to mark-to-market adjustments offset by decrease of $14,502 due to net distributions in Knight's fund investments, loan repayments of $2,684 and disposal of equity investments of $2,624 during the period. Given the nature of the fund investments there could be significant fluctuations in the fair value of the underlying assets.

Bank Loans: As at December 31, 2021, bank loans were at $35,927, a decrease of $15,843 or 31% as compared to the prior period, mainly due to loan repayment of $20,599 and a $4,674 decrease due to depreciation of LATAM currencies, partially offset by proceeds from bank loans of $9,423.

Product Updates

On March 1, 2021 the Company launched Ibsrela® for the treatment of IBS-C. The Company entered into an exclusive licensing agreement with Ardelyx to commercialize Ibsrela® in Canada in March 2018. Ibsrela® is a first-in-class small molecule treatment for IBS-C. Ardelyx received regulatory approval for Ibsrela® from the US FDA in September 2019.

On May 26, 2021, the Company entered into an agreement with Novartis to acquire the exclusive rights to manufacture, market and sell Exelon®, in Canada and Latin America as well as an exclusive license to use the intellectual property and the Exelon trademark, from Novartis within those territories. Exelon® is a prescription product that was first approved in 1997 and is currently registered and sold in approximately 90 countries. Exelon® is indicated for the symptomatic treatment of mild to moderately severe dementia in people with Alzheimer's disease and Parkinson’s disease.

Knight has entered into a transition service agreement with Novartis until transfer of marketing authorization, on a country-by-country basis during which Knight will receive a net profit transfer. Knight will begin distributing Exelon® upon transfer of marketing authorization, on a country-by-country basis. Knight has submitted the transfer of marketing authorizations for Brazil, Colombia, Mexico and Chile. Furthermore, Knight has received the regulatory notification that the marketing authorization for Exelon® in Brazil will transfer to its affiliate in June 2022 and expects the marketing authorizations for other territories to start transferring in the second half of 2022.

On September 22, 2021, Knight entered into a definitive agreement with Incyte Biosciences International Sàrl, for the exclusive rights to distribute tafasitamab (sold as Monjuvi® in the United States and Minjuvi® in Europe) and pemigatinib (Pemazyre®) in Latin America. Under the terms of the agreement Knight will be responsible for seeking the necessary regulatory approvals and distributing both products in Latin America. Knight expects to submit tafasitamab in key LATAM countries in 2022 and pemigatinib in 2023.

Knight obtained regulatory approval for Rembre® in Colombia, indicated for treatment of chronic myeloid leukemia with positive Philadelphia chromosome (Ph+). The product was launched in Colombia in February 2022.

Knight obtained INVIMA approval for Lenvima® in Colombia, the orally available multiple receptor tyrosine kinase inhibitor developed by Eisai, for the treatment of RR-DTC and u-HCC. Knight launched Lenvima® in Colombia in February 2022.

Knight obtained INVIMA approval for Halaven® injection in Colombia, indicated for the treatment of adult patients with locally advanced or metastatic breast cancer which has continued to spread after at least two previous treatment for advanced cancer. Previous treatment should have included anthracyclines and a taxane in either the adjuvant or metastatic setting, unless these treatments were not suitable. Halaven® is also used to treat patients with advanced or metastatic liposarcoma that cannot be surgically removed and who have already been treated with an anthracycline, unless deemed unsuitable. Knight launched Halaven® in Colombia in March 2022.

NCIB

On July 12, 2021, the Company announced that the Toronto Stock Exchange approved its notice of intention to launch a NCIB (“2021 NCIB”). Under the terms of the 2021 NCIB, Knight may purchase for cancellation up to 10,267,956 common shares of the Company which represented 10% of its public float as at December 31, 2021. The 2021 NCIB commenced on July 14, 2021 and will end on the earlier of July 13, 2022 or when the Company completes its maximum purchases under the NCIB. Furthermore, Knight entered into an agreement with a broker to facilitate purchases of its common shares under the NCIB. Under Knight’s automatic share purchase plan, the broker may purchase common shares which would ordinarily not be permitted due to regulatory restrictions or self-imposed blackout periods. For the year ended December 31, 2021, the Company purchased 12,321,864 (2020: 5,748,716) common shares at an average price of $5.23 (2020: $6.40) for an aggregate cash consideration of $64,415 (2020: $36,787). Subsequent to 2021, the Company purchased an additional 933,715 common shares at an average purchase price of $5.35 for an aggregate cash consideration of $4,997.

Financial Outlook

Knight provides guidance on revenues1 on a non-GAAP basis. This is due to both the difficulty in predicting Argentinian inflation rates and its IAS 29 impact.

For fiscal 2022, Knight expects to generate $260 to $265 million in revenue. The guidance is based on a number of assumptions, including but not limited to the following:

  • no revenues for business development transactions not completed as of December 31, 2021
  • discontinuation of certain distribution agreements
  • Exelon® marketing authorization transfer to Knight in June 2022 in Brazil
  • no interruptions in supply whether due to global supply chain disruptions or general manufacturing issues
  • no new generic entrants on our key pharmaceutical brands
  • no unforeseen changes to government mandated pricing regulations
  • successful commercial execution on product listing arrangements with HMOs, insurers, key accounts, and public payers
  • successful execution and uptake of newly launched products
  • no significant restrictions or economic shut down due to the COVID-19 pandemic
  • foreign currency exchange rates remaining within forecasted ranges

Should any of the assumptions differ, the financial outlook and the actual results may vary materially. Refer to the risks and assumptions referred to in the Forward-Looking Statements section of this news release for further details.

1 Revenues excluding the impact of IAS 29 is a non-GAAP measure, refer to the definitions below for additional details

Conference Call Notice 

Knight will host a conference call and audio webcast to discuss its fourth quarter and year-end results today at 8:30 am ET. Knight cordially invites all interested parties to participate in this call.

Date: Thursday, March 24, 2022
Time: 8:30 a.m. ET
Telephone: Toll Free: 888-254-3590 or International 1-647-794-4605
Webcast: www.gud-knight.com or Webcast
This is a listen-only audio webcast. Media Player is required to listen to the broadcast.

Replay: An archived replay will be available for 30 days at www.gud-knight.com

About Knight Therapeutics Inc. 

Knight Therapeutics Inc., headquartered in Montreal, Canada, is a specialty pharmaceutical company focused on acquiring or in-licensing and commercializing pharmaceutical products for Canada and Latin America. Knight owns Biotoscana Investments S.A., a pan-Latin American specialty pharmaceutical company. Knight’s Latin American subsidiaries operate under United Medical, Biotoscana Farma and Laboratorio LKM. Knight Therapeutics Inc.'s shares trade on TSX under the symbol GUD. For more information about Knight Therapeutics Inc., please visit the company's web site at www.gud-knight.com or www.sedar.com.

Forward-Looking Statement

This document contains forward-looking statements for Knight Therapeutics Inc. and its subsidiaries. These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. Knight Therapeutics Inc. considers the assumptions on which these forward-looking statements are based to be reasonable at the time they were prepared but cautions the reader that these assumptions regarding future events, many of which are beyond the control of Knight Therapeutics Inc. and its subsidiaries, may ultimately prove to be incorrect. Factors and risks, which could cause actual results to differ materially from current expectations are discussed in Knight Therapeutics Inc.'s Annual Report and in Knight Therapeutics Inc.'s Annual Information Form for the year ended December 31, 2021 as filed on www.sedar.com. Knight Therapeutics Inc. disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information or future events, except as required by law.

CONTACT INFORMATION:

Investor Contact: 
Knight Therapeutics Inc. 
Samira SakhiaArvind Utchanah
President & Chief Executive OfficerChief Financial Officer
T: 514.484.4483T. +598.2626.2344
F: 514.481.4116 
Email: info@knighttx.comEmail: info@knighttx.com
Website: www.gud-knight.com Website: www.gud-knight.com 


IMPACT OF HYPERINFLATION
[In thousands of Canadian dollars]

The Company applies IAS 29, Financial Reporting in Hyperinflation Economies, as the Company's Argentine subsidiaries used the Argentine Peso as their functional currency. IAS 29 requires that the financial statements of an entity whose functional currency is the currency of a hyperinflationary economy be adjusted based on an appropriate general price index to express the effects of inflation. If the Company did not apply IAS 29, the effect on the Company's operating income would be as follows:

 Q4-21  YTD-21  
 Reported
under
IFRS
 Excluding
impact of
IAS 291
 VarianceReported
under
IFRS
 Excluding
impact of
IAS 291
 Variance
 $2 %3$2 %3
         
Revenues58,273 56,358 1,915 3%243,478 239,238 4,240 2%
Cost of goods sold30,078 27,724 (2,354)8%128,066 120,409 (7,657)6%
Gross margin28,195 28,634 (439)2%115,412 118,829 (3,417)3%
Gross margin (%)48% 51%   47% 50%   
         
Expenses        
Selling and marketing10,430 10,050 (380)4%37,217 36,395 (822)2%
General and administrative11,863 11,656 (207)2%37,159 35,591 (1,568)4%
Research and development3,496 3,087 (409)13%12,692 12,080 (612)5%
Amortization of intangible assets17,040 16,355 (685)4%41,176 38,824 (2,352)6%
Operating loss(14,634)(12,514)(2,120)17%(12,832)(4,061)(8,771)216%
1 Financial results excluding the impact of hyperinflation is a non-GAAP measure. Refer to the definitions below for additional details
2 A positive variance represents a positive impact to net income due to the application of IAS 29 and a negative variance represents a negative impact to net income due to the application of IAS 29
3 Percentage change is presented in absolute values


NON-GAAP MEASURES
[In thousands of Canadian dollars]

Non-GAAP measures

The Company discloses non-GAAP measures that do not have standardized meanings prescribed by IFRS. The Company believes that shareholders, investment analysts and other readers find such measures helpful in understanding the Company’s financial performance and in interpreting the effect of the GBT Transaction on the Company. Non-GAAP financial measures do not have any standardized meaning prescribed by IFRS and may not have been calculated in the same way as similarly named financial measures presented by other companies.

The Company uses the following non-GAAP measures:

Revenues and Financial results excluding the impact of hyperinflation under IAS 29: Revenues and financial results under IFRS are adjusted to remove the impact of hyperinflation under IAS 29. Impact of hyperinflation under IAS 29 is calculated by applying an appropriate general price index to express the effects of inflation. After applying the effects of translation, the statement of income is converted using the closing foreign exchange rate of the month.

Financial results at constant currency: Financial results at constant currency are obtained by translating the prior period results from the functional currencies to CAD using the conversion rates in effect during the current period. Furthermore, with respect to Argentina, the Company excludes the impact of hyperinflation and translates the results at the average exchange rate in effect for each of the periods.

Financial results at constant currency allow results to be viewed without the impact of fluctuations in foreign currency exchange rates thereby facilitating the comparison of results period over period. The presentation of results under constant currency is considered to be a non-GAAP measure and does not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.

EBITDA: Operating income (loss) adjusted to exclude amortization and impairment of intangible assets, depreciation, PPA accounting adjustments, and the impact of IAS 29 (accounting under hyperinflation) but to include costs related to leases. In addition, EBITDA does not reflect the portion of GBT’s results attributable to the non-controlling interests.

Adjusted EBITDA: EBITDA adjusted for acquisition costs and non-recurring expenses.

Adjustments include the following:

  • With the adoption of IFRS 16, the lease payments of Knight are not reflected in operating expenses. The IFRS 16 adjustment approximates the cash outflow related to leases of Knight.
  • Acquisition costs relate to costs incurred on legal, consulting and advisory fees for the acquisition of GBT and the acquisition of products.
  • Other non-recurring expenses relate to expenses incurred by Knight that are not due to, and are not expected to occur in, the ordinary course of business.

The financial results under IFRS reconcile to the financial results at constant currency as follows:

 Q4-20YTD-20
Reported
under
IFRS		 IAS 29
Adjustment		 Constant
Currency
Adjustment		 Constant
Currency1		 Reported
under
IFRS		 IAS 29
Adjustment		 Constant
Currency
Adjustment		 Constant
Currency1		 
Revenues55,191 1,485 (3,269)53,407 199,519 3,017 (12,130)190,406 
Cost of goods sold35,131 (1,362)(2,067)31,702 117,829 (5,268)(8,696)103,865 
Gross margin20,060 2,847 (1,202)21,705 81,690 8,285 (3,434)86,541 
         
Expenses        
Selling and marketing8,657 630 (392)8,895 35,585 724 (1,715)34,594 
General and administrative11,421 137 (378)11,180 38,845 (631)(1,487)36,727 
Research and development3,690 94 (71)3,713 11,725 232 (248)11,709 
Amortization of intangible assets7,989 (367)(310)7,312 25,535 (506)(1,795)23,234 
Impairment of intangible assets656 — — 656 656 — — 656 
Operating loss(12,353)2,353 (51)(10,051)(30,656)8,466 1,811 (20,379)
EBITDA2(832)— (361)(1,193)7,761 — (2,639)5,122 
Adjusted EBITDA21,771 — (417)1,354 16,837 — (3,001)13,836 
1 Financial results at constant currency are non-GAAP measure, refer above for additional details
2 Financial results at constant currency, EBITDA and adjusted EBITDA are non-GAAP measures, refer to section “Non-GAAP measures” and “Reconciliation to adjusted EBITDA” for additional details


For the three-month period and year ended December 31, the Company calculated EBITDA and adjusted EBITDA as follows:

   Change  Change
 Q4-21 Q4-20 $1
  %2
YTD-21 YTD-20 $1
 %2
Operating (loss)(14,634)(12,353)(2,281)18%(12,832)(30,656)17,824 58%
Adjustments to operating (loss):        
Amortization of intangible assets17,040 7,989 9,051 113%41,176 25,535 15,641 61%
Impairment of intangible assets— 656 (656)100%— 656 (656)100%
Depreciation of property, plant and equipment and ROU assets1,961 1,624 337 21%6,739 6,540 199 3%
Lease costs (IFRS 16 adjustment)(874)(734)(140)19%(3,016)(3,139)123 4%
Impact of PPA accounting— — — 0%— 865 (865)100%
Impact of IAS 29608 1,986 (1,378)69%3,798 7,960 (4,162)52%
EBITDA4,101 (832)4,933 593%35,865 7,761 28,104 362%
Acquisition and transaction costs— — — 0%432 3,693 (3,261)88%
Other non-recurring expenses1,595 2,603 (1,008)39%1,708 5,383 (3,675)68%
Adjusted EBITDA35,696 1,771 3,925 222%38,005 16,837 21,168 126%
1 A positive variance represents a positive impact to net income (loss) and a negative variance represents a negative impact to net income (loss)
2 Percentage change is presented in absolute values
3 EBITDA and adjusted EBITDA are non-GAAP measures, refer above for additional details


CONSOLIDATED BALANCE SHEETS
[In thousands of Canadian dollars]



As at
  
December 31, 2021December 31, 2020
   
ASSETS  
Current  
Cash and cash equivalents85,963229,592
Marketable securities63,539147,316
Trade receivables55,38862,515
Other receivables5,05612,413
Inventories72,39756,505
Prepaids and deposits2,1652,214
Other current financial assets13,49134,431
Income taxes receivable6,9707,115
Total current assets304,969552,101
   
Marketable securities—15,317
Prepaids and deposits3,0464,208
Right-of-use assets4,6714,035
Property, plant and equipment25,26522,127
Investment properties1,4571,539
Intangible assets350,299156,547
Goodwill75,40377,725
Other financial assets178,952159,524
Deferred income tax assets2,0482,432
Other long-term receivables43,43141,582
 684,572485,036
Assets held for sale2,3502,539
Total assets991,8911,039,676



CONSOLIDATED BALANCE SHEETS (continued)
[In thousands of Canadian dollars]



As at
   
December 31, 2021 December 31, 2020 
   
LIABILITIES AND EQUITY  
Current  
Accounts payable and accrued liabilities65,309 44,512 
Lease liabilities1,614 1,875 
Other liabilities1,989 1,291 
Bank loans26,662 51,770 
Income taxes payable7,073 13,559 
Other balances payable2,655 1,053 
Total current liabilities105,302 114,060 
   
Accounts payable and accrued liabilities281 316 
Lease liabilities3,417 2,543 
Bank loan9,265 — 
Other balances payable19,235 14,900 
Deferred income tax liabilities12,373 21,616 
Total liabilities149,873 153,435 
   
Shareholders’ Equity  
Share capital628,854 694,351 
Warrants117 117 
Contributed surplus21,776 18,731 
Accumulated other comprehensive loss(376)(1,503)
Retained earnings191,647 174,545 
Total shareholders’ equity842,018 886,241 
Total liabilities and shareholders’ equity991,891 1,039,676 



CONSOLIDATED STATEMENTS OF (LOSS) INCOME
[In thousands of Canadian dollars, except for share and per share amounts]

 Three months ended December 31,Year ended December 31,
 2021 2020 2021 2020 
     
Revenues58,273 55,191 243,478 199,519 
Cost of goods sold30,078 35,131 128,066 117,829 
Gross margin28,195 20,060 115,412 81,690 
     
Expenses    
Selling and marketing10,430 8,657 37,217 35,585 
General and administrative11,863 11,421 37,159 38,845 
Research and development3,496 3,690 12,692 11,725 
Amortization of intangible assets17,040 7,989 41,176 25,535 
Impairment of intangible assets— 656 — 656 
Operating loss(14,634)(12,353)(12,832)(30,656)
     
Interest income on financial instruments measured at amortized cost(725)(1,635)(2,446)(9,112)
Other interest income(1,471)(1,172)(4,936)(5,210)
Interest expense1,331 328 3,618 3,398 
Other income(321)(36)(128)(169)
Net gain on financial assets measured at fair value through profit or loss(2,300)(25,418)(18,944)(48,060)
Net gain on mandatory tender offer liability— — — (12,072)
Realized gain on sale of asset held for sale— — — (2,948)
Realized gain on automatic share purchase plan— — — (4,168)
Foreign exchange loss3,485 4,490 3,737 14,156 
(Gain) Loss on hyperinflation(209)239 (423)1,444 
(Loss) income before income taxes(14,424)10,851 6,690 32,085 
     
Income tax     
Current(2,642)951 (1,349)2,337 
Deferred(3,481)1,667 (7,636)(2,012)
Income tax (recovery) expense(6,123)2,618 (8,985)325 
Net (loss) income for the period(8,301)8,233 15,675 31,760 
     
Attributable to:    
Shareholders of the Company(8,301)8,233 15,675 42,067 
Non-controlling interests— — — (10,307)
     
Attributable to shareholders of the Company    
Basic net (loss) earnings per share(0.07)0.06 0.13 0.32 
Diluted net (loss) earnings per share(0.07)0.06 0.13 0.32 
     
Weighted average number of common shares outstanding    
Basic120,112,158 130,104,506 124,480,259 131,783,255 
Diluted120,163,668 130,108,744 124,521,641 131,985,025 



CONSOLIDATED STATEMENTS OF CASH FLOWS

[In thousands of Canadian dollars]

 Three months ended December 31,Year ended December 31,
 2021 2020  2021 2020  
OPERATING ACTIVITIES    
Net (loss) income for the period(8,301)8,233 15,675 31,760 
Adjustments reconciling net income to operating cash flows:    
Depreciation and amortization19,001 9,613 47,915 32,075 
Net gain on financial instruments(2,300)(25,418)(18,944)(48,060)
Unrealized foreign exchange loss (gain)3,968 (237)2,881 9,429 
Other operating activities(1,589)3,387 (900)(13,833)
 10,779 (4,422)46,627 11,371 
Changes in non-cash working capital and other items(6,098)8,719 (2,009)(23,576)
Cash inflow (outflow) from operating activities4,681 4,297 44,618 (12,205)
     
INVESTING ACTIVITIES    
Purchase of marketable securities3 — (47,892)(37,778)
Proceeds on maturity of marketable securities90 10,264 146,986 237,263 
Investment in funds(5,466)(756)(16,429)(15,766)
Acquisition of shares through mandatory tender offer— — — (170,855)
Proceeds from distribution of funds17,519 2,132 30,931 29,128 
Purchase of intangible assets(153)(1,265)(220,351)(15,289)
Proceeds on sale of asset held for sale— — — 77,000 
Other investing activities(2,524)(2,175)1,476 (2,350)
Cash inflow (outflow) from investing activities9,469 8,200 (105,279)101,353 
     
FINANCING ACTIVITIES    
Repurchase of common shares through Normal Course Issuer Bid(23,508)(1,786)(64,415)(36,787)
Principal repayment on bank loans(5,688)(6,495)(20,599)(14,714)
Proceeds from bank loans7,098 13,583 9,423 24,581 
Other financing activities(788)(677)(2,719)(2,313)
Cash (outflow) inflow from financing activities(22,886)4,625 (78,310)(29,233)
     
(Decrease) increase in cash and cash equivalents during the period(8,736)17,123 (138,971)59,916 
Cash and cash equivalents, beginning of the period92,490 218,091 229,592 174,268 
Net foreign exchange difference2,209 (5,622)(4,658)(4,592)
Cash and cash equivalents, end of the period85,963 229,592 85,963 229,592 
     
Cash and cash equivalents  85,963 229,592 
Short-term marketable securities  63,539 147,316 
Long-term marketable securities  — 15,317 
Total cash, cash equivalents and marketable securities  149,502 392,225