Atrium Innovations Announces 2012 Fourth Quarter and Full Year - Financial Results
Strong Currency-Neutral Organic Growth of 7.5%
QUEBEC CITY, Feb. 27, 2013 /PRNewswire/ - 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 fourth quarter and full year results for the period ended December 31, 2012.
2012 and Subsequent Year-End Highlights:
(All amounts are in US dollars.)
- Total revenue growth was 5.5% or 7.5% on a currency-neutral basis over last year to reach $437.5 million
- Launched over 150 new products during the year
- Adjusted EBITDA of $87.3 million or 20.0% of revenues
- Adjusted diluted EPS* of $1.68 for the year
- Solid adjusted operating cash flows before changes in non-cash working capital items and interest expenses of $74.9 million
- Repurchased 956,650 shares under NCIB program during the year
- Special charges taken for North American restructuring plan, one-time ERP-related inventory adjustment and regulatory legal claims (Prop 65) and related expenses
- Goodwill impairment charge for Nutri Health®
* Without giving effect to the dilutive impact of the convertible debentures
"Our focus on organic growth is well reflected in currency neutral revenue growth of 7.5% for the year, despite challenging market conditions in Europe. During the year we introduced over 150 new products derived from a combination of licensing agreements, cross-selling, our Research Program, and our global sourcing efforts. New products remain critical to maintaining our leadership position," indicated Pierre Fitzgibbon, President and CEO of Atrium Innovations.
"We remain committed to the direct-to-consumer business and anticipate a positive contribution in 2013. However, we have reduced the scale of our current operations to address the new regulatory environment and consequently required an evaluation of the business leading to a goodwill impairment charge in the fourth quarter.
"We are well into our ERP implementation program. We recently conducted a successful 'go live' in our Boston facility, the second after Philadelphia. While the project has so far required significant investments, management attention and fundamental changes in some internal processes, the future benefits will include an unprecedented level of information on the business. In a more regulated environment and rapidly evolving industry, the ERP system has become essential to our operations.
"In the second quarter of 2012, we announced a European restructuring program which was completed, as planned, in the second half of the year. We are now also initiating a restructuring program in North America to streamline and reorganize some operations.
"We enter 2013 with confidence and expect revenue growth of between 5%-7% for the year. Following an active period of acquisitions, we have spent the past two years investing heavily in optimizing all aspects of Atrium. We are satisfied of what has been accomplished while some work remains to be done in our Pittsburgh facilities," concluded Mr. Fitzgibbon.
For the year ended December 31, 2012, Atrium recorded revenues of $437.5 million, representing an increase of 5.5% or 7.5% on a currency-neutral basis, compared to revenues of $414.7 million in 2011. The increase is mainly attributable to the solid performance of our branded products with organic growth of 9.4% led by solid momentum of HealthCare Practitioner ("HCP") and Health Food Store ("HFS") brands.
Adjusted EBITDA for the year was $87.3 million or 20.0% of revenues compared to $91.0 million or 21.9% of revenues for the same period in 2011. The EBITDA decreased by $3.7 million over last year largely explained by the unfavourable euro/USD exchange rate with an impact of $2.3 million.
Net income attributable to shareholders was $35.2 million in 2012 compared to $55.9 million in 2011, while net earnings per share on a diluted basis were $1.08 per share, as compared to $1.61 per share for the same period in 2011. Adjusted net income was $53.3 million in 2012 compared to $56.3 million in 2011 and adjusted diluted EPS were $1.68 in 2012 compared to $1.70 in 2011. See section below for full details of reconciliation to non-IFRS financial data.
Adjusted cash flows from operating activities before changes in non-cash working capital items and interest expenses were $74.9 million compared to $75.1 million in 2011.
During the year, under its NCIB (Normal Course Issuer Bid) program, the Company repurchased and cancelled 956,650 common shares for a total consideration of $10.2 million (65,582 common shares and $0.7 million in the fourth quarter of 2012).
Financial Results for the Fourth Quarter of 2012
For the quarter ended December 31, 2012, Atrium recorded revenues of $110.5 million representing an increase of 5.4% or 6.4% on a currency-neutral basis, compared to revenues of $104.8 million in 2011. The increase is mainly attributable to the solid performance of our branded products with organic growth of 7.5% led by solid momentum of HCP and HFS brands.
Adjusted EBITDA for the quarter was $21.1 million or 19.1% of revenues compared to $21.7 million or 20.7% of revenues for the same period in 2011. The EBITDA decreased by $0.6 million over last year largely explained by the unfavourable euro/USD exchange rate with an impact of $0.4 million.
Net loss attributable to shareholders was $2.1 million for the fourth quarter of 2012 compared to a net income of $14.0 million in 2011, while net loss per share on a diluted basis was $0.07, as compared to earnings per share of $0.37 for the same period in 2011. Adjusted net income was $12.5 million for the fourth quarter of 2012 compared to $14.2 million in 2011 and adjusted diluted EPS were $0.40 for the fourth quarter of 2012 compared $0.43 in 2011. See section below for full details of reconciliation to non-IFRS financial data.
Adjusted cash flows from operating activities before changes in non-cash working capital items and interest expenses were $17.3 million compared to $18.1 million in 2011 for the fourth quarter.
As at December 31, 2012, the Company had a total debt of $278.0 million and a cash position of $9.9 million.
About Atrium Innovations
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 seven 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 2012 fourth quarter and full year results on February 28, 2013 at 8:00 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). They may also access the live webcast via the Company's website at www.atrium-innovations.com in the Presentations & 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-IFRS Financial Measures
The Company provides non-IFRS financial measures (Gross profit*, EBIT*, Adjusted EBITDA*, Net income under non-IFRS*, Adjusted cash flows from operating activities* and Earnings per share ("EPS*) under non-IFRS*) 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 revenues less cost of sales. EBIT means net income excluding other revenues (expenses) and the income tax expense. 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. Net income under non-IFRS 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 ERP-related inventory adjustment net of taxes. EPS under non-IFRS is calculated using the net income under non-IFRS and in some cases, does not take into consideration the dilutive effect of convertible debentures for the diluted calculation.
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 years ended December 31, |
| | 2012
$ | | 2011
$ | | Change |
| | | | | | |
| Revenues | 437.5 | | 414.7 | | +5% |
| | | | | | |
| Gross profit (1) | 220.6 | | 224.9 | | |
| | 50.4% | | 54.2% | | |
| | | | | | |
| Adjusted EBITDA (2) | 87.3 | | 91.0 | | -4% |
| | 20.0% | | 21.9% | | |
| | | | | | |
| Net income attributable to shareholders | 35.2 | | 55.9 | | -37% |
| | | | | | |
| Diluted net earnings per share | 1.08 | | 1.61 | | -33% |
| Reconciliation to non-IFRS Financial Data | | | | | |
| Net income attributable to shareholders | 35.2 | | 55.9 | | |
| Impairment of goodwill related to Nutri-Health (after-tax) | 10.2 | | - | | |
| Non-recurring items (after-tax) (3) | 7.9 | | 0.4 | | |
| Adjusted income under non-IFRS | 53.3 | | 56.3 | | -5% |
| | | | | | |
| Diluted EPS under non-IFRS (4) | 1.68 | | 1.70 | | -1% |
| (1) | Gross profit means revenues less cost of sales. |
| (2) | Adjusted EBITDA means income before interest, tax, depreciation, amortization, impairment, restructuring costs, related acquisition costs, regulatory legal claims (Prop 65) and related legal expenses and one-time ERP-related inventory adjustment. |
| (3) | Restructuring costs, regulatory legal claims (Prop 65) and related legal expenses and one-time ERP-related inventory adjustment. |
| (4) | 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 fourth quarters ended December 31, |
| |
| | 2012
$ | | 2011
$ | | Change |
| | | | | | |
| Revenues | 110.5 | | 104.8 | | +5% |
| | | | | | |
| Gross profit (1) | 51.6 | | 57.0 | | |
| | 46.7% | | 54.4% | | |
| | | | | | |
| Adjusted EBITDA (2) | 21.1 | | 21.7 | | -3% |
| | 19.1% | | 20.7% | | |
| | | | | | |
| Net income (loss) attributable to shareholders | (2.1) | | 14.0 | | |
| | | | | | |
| Diluted net earnings (loss) per share | (0.07) | | 0.37 | | |
| Reconciliation to non-IFRS Financial Data | | | | | |
| | | | | | |
| Net income (loss) attributable to shareholders | (2.1) | | 14.0 | | |
| Impairment of goodwill related to Nutri-Health (after-tax) | 10.2 | | - | | |
| Non-recurring items (after-tax) (3) | 4.4 | | 0.2 | | |
| Adjusted net income under non-IFRS | 12.5 | | 14.2 | | -12% |
| | | | | | |
| Diluted EPS under non-IFRS (4) | 0.40 | | 0.43 | | -9% |
| (1) | Gross profit means revenues less cost of sales. |
| (2) | Adjusted EBITDA means income before interest, tax, depreciation, amortization, impairment, restructuring costs, relate acquisition costs, regulatory legal claims (Prop 65) and related legal expenses and one-time ERP-related inventory adjustment. |
| (3) | Restructuring costs, regulatory legal claims (Prop 65) and related legal expenses and one-time ERP-related inventory adjustment. |
| (4) | Without giving the dilutive effect of the convertible debentures. |
SOURCE ATRIUM INNOVATIONS INC.