Company transformation activities on track
TORONTO, March 9, 2012 /PRNewswire/ - Patheon Inc. (TSX: PTI), a leading
provider of contract development and manufacturing services to the
global pharmaceutical industry, announced today fiscal 2012 first
quarter results. Quarterly results include:
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Revenues of $153.9 million versus $175.7 million in the first quarter of
last year. Excluding the $32.9 million impact of the reservation fee
and accelerated deferred revenue associated with the termination of a
manufacturing supply agreement in the first quarter of the fiscal year
ended October 31, 2011, revenues increased by 7.8 percent.
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Operating loss of $20.9 million, which includes $6.4 million in
consulting fees, compared to operating income of $13.5 million in the
first quarter of last year, a decrease of $34.4 million. Excluding the
impact of the prior year termination of a manufacturing supply
agreement, the decrease would have been $1.5 million.
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Loss before discontinued operations of $19.3 million compared to income
before discontinued operations of $3.7 million in the same period last
year. This decrease was primarily driven by the after tax impact of
the reservation fee and accelerated deferred revenue associated with
the termination of a manufacturing and supply agreement recorded in the
first quarter of fiscal 2011 and $6.4 million of consulting fees.
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Adjusted EBITDA of $(9.2) million compared to $28.7 million in the same
period last year, a decrease of $37.9 million. Excluding the impact of
the prior year termination of the manufacturing supply agreement, the
decrease would have been $5.0 million, primarily due to $6.4 million in
consulting fees.
In commenting on Patheon's results, James C. Mullen, Patheon's Chief
Executive Officer said, "Our first quarter of fiscal 2012 demonstrates
that our underlying business has improved. The transformation
activities are on track as we continue to improve efficiencies and
productivity at the site level and in our general and administrative,
pricing and procurement functions. In the second half of our fiscal
year, consulting costs related to implementing our transformation
program should decline and we anticipate recognizing real cost savings
from our initiatives. Top line growth together with improved
performance should deliver improved financial results in the future."
Fiscal 2012 First Quarter Operating Results from Continuing Operations
Revenues for the three months ended January 31, 2012 decreased $21.8
million to $153.9 million, from $175.7 million for the comparable
period in fiscal 2011. Excluding currency fluctuations, revenues for
the three months ended January 31, 2012 would have been approximately
11.8 percent lower than the same period of prior year. The decline was
primarily due to the reservation fee and accelerated deferred revenue
associated with the termination of a manufacturing supply agreement in
the first quarter of fiscal 2011, the impact of which was $32.9
million.
Gross profit for the three months ended January 31, 2012 decreased $27.8
million to $14.4 million, from $42.2 million for the comparable period
in fiscal 2011. The decrease in gross profit was primarily due to lower
revenue and unfavorable mix, partially offset by lower accelerated
depreciation in Puerto Rico.
Selling, general and administrative expenses for the three months ended
January 31, 2012 increased $6.7 million to $34.5 million, from $27.8
million for the comparable period in fiscal 2011. The increase was
primarily due to higher consulting fees related to our transformation
activities and higher compensation expense.
Operating (loss) income for the three months ended January 31, 2012
decreased $34.4 million to a loss of $20.9 million (-13.6 percent of
revenues), from income of $13.5 million (7.7 percent of revenues) for
the first quarter of fiscal 2011, as a result of the factors discussed
above.
As of January 31, 2012, the company was holding cash and cash
equivalents of $32.5 million and had undrawn lines of credit available
of $93.8 million.
Fiscal 2012 First Quarter Highlights of Business Segment Results
Commercial Manufacturing - Total CMO revenues for the three months ended January 31, 2012
decreased $25.9 million to $122.8 million, from $148.7 million for the
comparable period in 2011. Had local currency exchange rates remained
constant to the rates of the three months ended January 31, 2011, CMO
revenues for the period would have been approximately 16.8 percent
lower than the same period of prior year. Excluding the $32.9 million
impact from the termination of the previously mentioned manufacturing
supply agreement, total CMO revenues for the quarter would have
increased $7.0 million, or 6.0 percent from the same period of prior
year.
Total CMO Adjusted EBITDA for the three months ended January 31, 2012
decreased $37.2 million to negative Adjusted EBITDA of $1.6 million,
from $35.6 million for the comparable period in 2011. The decrease was
driven by the lower revenue, as discussed above, unfavorable mix and
$3.2 million in consulting fees.
Pharmaceutical Development Services ("PDS") - Total PDS revenues for the three months ended January 31, 2012
increased by $4.1 million to $31.1 million, from $27.0 million for the
comparable period in 2011. Had the local currency rates remained
constant to the three months ended January 31, 2011, PDS revenues in
the quarter would have been 15.6 percent higher than the same period of
prior year. Higher development activities from new contracts across
most sites contributed to the improved performance.
Total PDS Adjusted EBITDA for the three months ended January 31, 2012
increased by $1.3 million to $3.9 million, from $2.6 million for the
comparable period in 2011. Improved revenues contributed to the higher
Adjusted EBITDA.
Corporate - Corporate costs for the three months ended January 31, 2012 increased
$2.0 million to $11.5 million, from $9.5 million for the comparable
period last year primarily due to higher consulting fees.
Conference Call
Patheon will host a conference call and Web cast today (March 9, 2012)
at 10:00 a.m. (EST). Interested parties are invited to access the
conference call, via telephone, toll free at 1-888-231-8191 (U.S.,
including Puerto Rico) and 1-647-427-7452 (Canada and International).
To view the slides accompanying the conference call click here. The link to the Web cast will also be posted on the investor
relations section of Patheon's Web site prior to the call.
Participants are encouraged to dial in five to fifteen minutes in
advance to avoid delays. A live audio will also be available via the
web at http://ir.patheon.com/events.cfm. (Please note that either Windows Media Player or RealPlayer are
required).
A telephone replay of the conference call will be available between
March 9, 2012 and March 16, 2012 by dialing 1-855-859-2056(toll free) or 1-403-451-9481, and by entering identification number
55107868, followed by the number key. The conference call will also be
archived at http://ir.patheon.com/events.cfm.
About Patheon
Patheon Inc. (TSX: PTI) is a leading global provider of contract
development and manufacturing services to the global pharmaceutical
industry. The company provides the highest quality products and
services to approximately 300 of the world's leading pharmaceutical and
biotechnology companies. Its services range from preclinical
development through commercial manufacturing of a full array of dosage
forms including parenteral, soft gel, solid and liquid forms.
The company's comprehensive range of fully integrated Pharmaceutical
Development Services includes pre-formulation, formulation, analytical
development, clinical manufacturing, scale-up and commercialization.
The company's integrated development and manufacturing network of 10
manufacturing facilities, nine development centers and one clinical
trial material packaging facility across North America and Europe,
enables customer products to be launched with confidence anywhere in
the world.