Significant increase in revenues and net earnings from continuing
operations of 48% and 67% respectively
All amounts are in US dollars.
QUEBEC CITY, Nov. 4 /CNW Telbec/ - Atrium Innovations Inc. (TSX: ATB), a recognized leading developer, manufacturer and marketer of science-based and professionally endorsed products for the Health and Nutrition industry, today disclosed its financial results for the third quarter of 2008.
Quarterly highlights: - Strong organic growth in sales and earnings; - US$19.0 million of EBITDA and US$0.37 per share in the third quarter; - Acquisition of Orthos, a Netherland-based company; - The integration of two acquisitions in 2008, MCO and Orthos, are proceeding according to plan; - Strong financial position and well positioned to pursue its acquisition strategy.
During the quarter ended September 30, 2008, Atrium recorded revenues from continuing operations of $75.4 million, which represents an increase of 48% compared to revenues of $50.9 million for the corresponding quarter in 2007. This increase is mainly attributable to the acquisition of MCO and to organic growth. Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations for the third quarter of 2008 increased by 29% to $19.0 million compared to $14.7 million for the same period in 2007. For the quarter ended September 30, 2008, net earnings from continuing operations were $12.1 million compared to $7.2 million for the same period in 2007, representing an increase of 67%. The net earnings per share on a diluted basis from the continuing operations rose to $0.37 per share, compared to $0.22 per share for the same period in 2007.
The Company's total net earnings were $12.1 million for the third quarter of 2008 compared to $9.8 million for the corresponding period in 2007. For the third quarter of 2008, net earnings per share on a diluted basis rose to $0.37 per share, compared to $0.30 per share for the same period in 2007. It should be noted that amounts of 2007 include discontinued operations.
For the nine-month period ended September 30, 2008, revenues from continuing operations were $215.7 million, up 88% from $115.0 million for the corresponding period in 2007. EBITDA from continuing operations for the first nine months of 2008 was $55.5 million, an increase of 72% compared to $32.3 million for the same period last year. For the nine-month period ended September 30, 2008, total net earnings from continuing operations increased by 99% to $33.3 million generating fully diluted earnings per share of $1.01, compared to $16.7 million and $0.51 per share for the same period of 2007.
Strength and Resilience
"Once again these excellent results reaffirm the soundness and strength of Atrium's business model. By focusing on the niche market of high quality science-based and professionally endorsed nutritional supplements, Atrium has effectively mitigated against the risk of sales volume volatility. This strategic positioning provides greater resilience to withstand unfavourable economic conditions such as those we are now facing. As a result, and in contrast to the current market conditions, we are confident that our operations will continue to show profitable organic growth in the following quarters", said Mr. Pierre Fitzgibbon, Atrium's President and Chief Executive Officer.
In addition to the implementation of its solid organic growth program, Atrium also intends to pursue its acquisition program in the short to medium term. "At a time when access to credit and capital markets is a challenge for most companies, Atrium has successfully positioned itself in a strong and viable financial situation. We possess the financial ability to pursue our growth program without the need to raise additional capital or enter into new credit facilities", Mr. Fitzgibbon added.
For the third quarter of 2008, cash flows from continuing operating activities, before changes in non-cash working capital items, were $13.0 million, an increase of 56% compared to $8.3 million for the same period of the preceding year. For the nine-month period ended September 30, 2008, cash flows from continuing operating activities, before changes in non-cash working capital items, were $36.9 million, an increase of 89% compared to $19.5 million for the same period in 2007. As at September 30, 2008, the Company had a total debt amounting to $145.9 million as the Company has a revolving credit facility that provides $300 million of borrowing capacity. In addition, through an unsecured loan, the Company has additional capacity of $35.9 million that can be used in whole or in part by December 31, 2008.
About Atrium
Atrium Innovations Inc. is a recognized leading developer, manufacturer and marketer 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 North America and Europe. Atrium has over 625 employees and operates five manufacturing facilities. Additional information about Atrium is available on its Web site at www.atrium-innov.com.
Conference Call and Webcast
Atrium will hold its quarterly conference call and webcast to discuss its 2008 third quarter results on Tuesday, November 4, 2008 at 10:00 a.m. Eastern time. Participants may access the call by using the following numbers: 416-644-3417, 514-807-8791 or 800-732-0232. A live webcast is also available via the Company's website at www.atrium-innov.com 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.
Caution Regarding Non-GAAP Measures
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.
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, 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.
Attachment: Financial summary
Atrium Innovations Inc.
Summary of Interim Consolidated Financial Statements
(in millions of US dollars except per share amounts)
Consolidated Results for the 3-month periods ended September 30,
(unaudited)
2008 2007 Change
-------- -------- ---------
Revenues 75.4 50.9 48.1%
Gross Margin(1) 37.1 27.1 36.9%
49.2% 53.3%
EBITDA(2) 19.0 14.7 29.2%
25.2% 28.8%
Net earnings from continuing
operations 12.1 7.3 66.6%
Net earnings from discontinued
operations - 2.5
-------- --------
Net earnings 12.1 9.8
-------- --------
Net earnings per share from continuing
operations
Basic 0.37 0.23
Diluted 0.37 0.22
Net earnings per share
Basic 0.37 0.32
Diluted 0.37 0.30
Cash flow from continuing operating
activities before changes in non-cash
operating working capital items 13.0 8.3 55.5%
(1) Gross margin means sales less cost of goods sold.
(2) EBITDA means earnings before interest, income taxes, depreciation and
amortization.
Consolidated Results for the 9-month periods ended September 30,
(unaudited)
2008 2007 Change
-------- -------- ---------
Revenues 215.7 115.0 87.6%
Gross Margin(1) 109.9 59.2 85.4%
50.9% 51.5%
EBITDA(2) 55.5 32.3 72.0%
25.7% 28.1%
Net earnings from continuing
operations 33.3 16.7 99.0%
Net earnings from discontinued
operations 37.3 8.3
-------- --------
Net earnings 70.6 25.0
-------- --------
Net earnings per share from continuing
operations
Basic 1.03 0.54
Diluted 1.01 0.51
Net earnings per share
Basic 2.18 0.81
Diluted 2.14 0.76
Cash flow from continuing operating
activities before changes in non-cash
operating working capital items 36.9 19.5 89.2%
Consolidated Balance Sheet
(unaudited) As at As at
September 30, December 31,
2008 2007
-------------- -------------
Cash and cash equivalents 25.8 27.4
Other current assets 95.8 162.2
Goodwill 189.9 168.8
Other long-term assets 205.1 266.8
-------------- -------------
Total assets 516.6 625.2
-------------- -------------
Short-term liabilities 39.8 79.7
Long-term debt 145.8 279.0
Other long-term liabilities 59.1 55.6
Shareholders' equity 271.9 210.9
-------------- -------------
Total liabilities and shareholders' equity 516.6 625.2
-------------- -------------
(1) Gross margin means sales less cost of goods sold.
(2) EBITDA means earnings before interest, income taxes, depreciation and
amortization.
