Increase of 44% in net earnings from continuing operations during Fiscal
2007 and 74% growth for the fourth quarter of 2007
All amounts in US dollars
QUEBEC, Feb. 28 /CNW Telbec/ -Atrium Innovations Inc. (TSX: ATB) today discloses its annual financial results and also reconfirms the strategic refocusing of its business operations. Atrium intends to concentrate its operations uniquely in the health and nutrition sector (presented here as continuing operations) and, consequently, has decided to divest its Active Ingredients & Specialty Chemicals Division (presented as discontinued operations). This decision, which was made in the best interest of both divisions, follows a strategic re-evaluation process of the AI & SC Division initiated by the Company on December 18, 2007. It became clear that focusing on one sector would be the best option for Atrium to optimize its future development and profitability.
During the fiscal year ended December 31, 2007, Atrium recorded revenues from continuing operations of US$172.8 million, which is an increase of 50.7% compared to revenues of US$114.7 million posted for the preceding fiscal year. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) from continuing operations for fiscal 2007 increased by 66.1% to reach US$46.0 million, compared to US$27.7 million for the same period in 2006. For the year ended December 31, 2007, net earnings from continuing operations rose by 43.8% to US$24.8 million, compared to US$17.2 million for the same period in 2006. The Company's total net earnings were US$35.7 million, which is an increase of 34.0% compared to net earnings of US$26.7 million for the corresponding period in 2006. Net earnings per share on a diluted basis for fiscal 2007 rose by 32.9% to reach US$1.09, compared to US$0.82 per share for the preceding fiscal year.
"We ended the year 2007 on a strong note. On one hand, we have posted strong financial results and on the other hand, we have undertaken the strategic refocusing of our operations to concentrate on the highly promising health and nutrition sector. This decision should prove greatly beneficial to the Company's future. We are confident that we will be able to complete the divestiture of our Active Ingredients & Specialty Chemicals Division during the second quarter at a fair price for our shareholders reflecting the full value of this division. Furthermore, during the current fiscal year we would like to pursue our development plan to be driven by a sustained organic growth and new acquisitions that respect our rigorous strategic and financial criteria," said Mr. Pierre Fitzgibbon, Atrium's President and Chief Executive Officer.
Cash flows from continuing operations (before changes in non-cash working capital items) for fiscal 2007 were US$26.6 million, an increase of 31.9% compared to US$20.1 million for the same period of the preceding year. The Company has a revolving credit facility that provides US$350 million of borrowing capacity under certain conditions and the possibility of increasing this capacity to US$425 million. As at December 31, 2007, the Company had drawn down US$265.5 million under this credit facility. In addition, the Company has supplementary capacity, through an unsecured loan, of US$36.9 million which can be used in whole or in part from now until May 21, 2008.
"The Company's financial situation is solid. Because of the capacity available through our current financings and the net proceeds from the eventual divestiture of our Active Ingredients & Specialty Chemicals Division, we should have the financial resources required to support our future growth," added Mr. Fitzgibbon.
Discontinued Operations - Active Ingredients and Specialty Chemicals
(AI & SC) Division
Reporting now the AI & SC Division as discontinued operations has changed the distribution of head office expenses. These expenses are now 100% absorbed by Health & Nutrition, rather than being distributed between the two divisions.
For the year ended December 31, 2007, the Active Ingredients & Specialty Chemicals Division, presented under operations to be sold, generated revenues of US$221.6 million, which is an increase of 15.8% compared to revenues of US$191.4 million recorded for the same period in 2006. For fiscal 2007, the EBITDA was US$19.1 million compared to an EBITDA of US$17.1 million for the corresponding period in 2006, an increase of 11.8 %. This growth is attributable to strong organic growth and the acquisition of Amisol in May 2006.
Financial results for the fourth quarter of 2007
For the three month period ended December 31, 2007, the Company recorded revenues under continuing operations of US$57.9 million, compared to revenues of US$28.9 million for the same period of the preceding fiscal year, for an increase of 100.5 %. The EBITDA rose by 114.8% to reach US$13.7 million, compared to US$6.4 million for the same period in 2006. Net earnings from continuing operations in the fourth quarter of 2007 were US$8.1 million, for an increase of 73.9% compared to net earnings from continuing operations of $4.6 million for the corresponding quarter in 2006. This growth is mainly attributable to Mucos acquisition in July 2007 and strong organic growth. The weighted average number of shares outstanding was in the fourth quarter of 2007 was 31.1 million compared to 30.6 million for the same period in 2006.
For the three month period ended December 31, 2007, the Active Ingredients & Specialty Chemicals Division, presented as discontinued operations, generated revenues of US$64.5 million, for an increase of 20.2% compared to revenues of US$53.7 million recorded for the same period in 2006. For fiscal 2007, the EBITDA was US$4.5 million compared to an EBITDA of US$4.4 million for the corresponding period in 2006, an increase of 3.9%. This increase is attributable to organic growth and the acquisition of Amisol in May 2006.
Overall, for the three-month period ended December 31, 2007, the Company's net earnings were US$10.7 million, or US$0.34 per share, which is an increase of 52.4% compared to net earnings of US$7.0 million, or US$0.23 per share, for the corresponding period in 2006.
About Atrium
Atrium Innovations Inc. is a recognized leading developer, manufacturer and marketer of science-based products for the cosmetics, pharmaceutical, chemical and nutrition industries. The Company focuses primarily on growing segments of the health and personal care markets which are benefiting from the trends towards healthy living and the ageing of the population. Atrium markets a broad portfolio of active ingredients, specialty chemicals and health and nutrition finished products through its highly specialized sales and marketing network in more than 50 countries, primarily in North America, Europe and Asia. Atrium has over 700 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 fourth quarter and full year 2007 on Friday February 29, 2008 at 1:30 p.m. Eastern time. Participants may access the call by using the following numbers: 416-644-3420, 514-807-8791 or 1-800-731-5774. 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 is 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 Consolidated Financial Statements
(in millions of US dollars except per share amounts)
Consolidated Results from continuing operations for the year ended
December 31
(unaudited)
2007 2006 Change
Revenues 172.8 114.7 50.7%
Gross Margin(1) 90.2 51.0 76.7%
52.2% 44.5%
EBITDA(2)(3) 46.0 27.7 66.1%
26.6% 24.1%
Net Earnings from continuing
operations 24.8 17.2 43.8%
Cash flow from continuing
operating activities before
changes in non-cash operating
working capital items 26.6 20.1 31.9%
Results - Other information
2007 2006 Change
Net Earnings from discontinued
operations 10.9 9.4 16.1%
Net Earnings 35.7 26.7 34.0%
Net earnings per share
Basic 1.16 0.88
Diluted 1.09 0.82
Consolidated Results from continuing operations for the 3-month periods
ended December 31
(unaudited)
2007 2006 Change
Revenues 57.9 28.9 100.5%
Gross Margin(1) 30.9 13.2 134.8%
53.4% 45.6%
EBITDA(2)(3) 13.7 6.4 114.9%
23.7% 22.1%
Net Earnings from continuing
operations 8.1 4.6 73.9%
Cash flow from continuing operating
activities before changes in non-cash
operating working capital items 7.1 4.6 55.5%
Results - Other information
2007 2006 Change
Net Earnings from discontinued
operations 2.7 2.4 10.8%
Net Earnings 10.7 7.0 52.4%
Net earnings per share
Basic 0.34 0.23
Diluted 0.33 0.22
Consolidated Results from operations to be sold for the year ended
December 31
(unaudited)
2007 2006 Change
Active Ingredients & Speciality
Chemicals
Revenues 221.6 191.4 15.8%
EBITDA(2)(3) 19.1 17.1 11.8%
8.6% 8.9%
Consolidated Results from operations to be sold for the 3-month periods
ended December 31
(unaudited)
2007 2006 Change
Active Ingredients & Speciality
Chemicals
Revenues 64.5 53.7 20.2%
EBITDA(2)(3) 4.5 4.4 3.9%
7.0% 8.1%
Consolidated Balance Sheet As at As at
(unaudited) Dec. 31, 2007 Dec. 31, 2006
Cash and Cash Equivalents and Short-term
Investments 27.4 13.0
Current assets 189.6 121.7
Goodwill 168.8 63.1
Intangible assets and deferred charges 177.9 65.6
Total assets 625.2 324.5
Total debt 279.1 92.2
Shareholders' equity 210.9 159.0
(1) Gross margin means sales less cost of goods sold.
(2) EBITDA means earnings before interest, income taxes, depreciation and
amortization.
(3) Continuing operations, H&N division, supports now 100% of the Head
Office fees which is comparable to 2006
