QUEBEC CITY, Nov. 9 /PRNewswire-FirstCall/ - Atrium Biotechnologies Inc. today announced that it had revenues of $52.9 million for the third quarter ended September 30, 2005, up 29% from $41 million for the corresponding quarter of the previous fiscal year. Earnings before interest and taxes (EBIT) for the third quarter of 2005 were $6.4 million, down 2% from $6.5 million for the same period last year. EBIT would have increased by 7%, if we excluded the foreign exchange impact of 9%. Net earnings increased 34% to $3.7 million for the third quarter of 2005, compared to $2.8 million for the same period last year. “These results continue to clearly demonstrate that our growth strategy based on accretive acquisitions, the introduction of new products and the penetration of new markets continues to pay off,” said Luc Dupont, President and Chief Executive Officer of Atrium.
Earnings per share were $0.13 per share for the quarter compared to $0.12 per share for the third quarter of last year. The significant increase in net earnings allowed the Company to maintain earnings per share basically unchanged even though the weighted average number of shares outstanding was 29.1 million during the third quarter 2005 compared to 22.7 million during the third quarter 2004. The increase in shares outstanding is mainly due to the issuance of shares for the initial public offering completed on April 6, 2005 and the acquisition of the minority interest in its subsidiary Unipex.
Cash flows from operations (before changes in non-cash working capital items) for the quarter were $5.1 million, up 20% from $4.2 million for the same period last year.
On September 15, 2005, Atrium entered into a tax loss monetization program with its parent company AEterna Zentaris Inc. . The Company believes that this program will allow it to benefit from a part of AEterna Zentaris’ tax losses and result in future annual savings of $3 million.
Recent Developments
On November 8, 2005, the Company modified its existing $75 million revolving credit facility to increase the authorized amount to $125 million with the flexibility to increase it up to $200 million. As of September 30, 2005, $9 million was drawn under the existing facility. “Our cash flow generating capacity and new credit facility will allow the Company to fund future acquisitions to reinforce our existing leadership position in each of our operating divisions,” added Mr. Dupont.
Board of Directors
Pierre Laurin, Chairman of the Board of Atrium, announced the appointment of Placide Poulin to the Board of Atrium. Mr. Poulin is the founder and former Chairman of the Board of MAAX Inc., a North American leader in the bath, kitchen and spa sectors with over $500 million in sales prior to the sale of the company in 2004. Also, Jacques Gauthier is appointed to the Audit Committee replacing former Board member Yves Milord.
“We are delighted to be able to count on Mr. Poulin’s expertise and vast business experience to pursue our strategic plan”, stated Pierre Laurin. “I would also like to thank Mr. Milord for his contribution during the last years.”
Nine-Month Financial Results
For the nine-month period ended September 30, 2005, revenues were $174.6 million compared to $133.8 million in 2004, representing a 30% increase. EBIT increased 13% to $22.7 million, compared to $20 million for the same period in 2004. Again, excluding the foreign exchange impact of 9%, EBIT would have increased by 22%. Net earnings increased 21% to $12.6 million or $0.46 per share, compared to $10.4 million or $0.46 per share for the same period in 2004. The weighted average number of shares outstanding was 27.3 million during the period compared to 22.7 million during the same period last year.
About Atrium
Atrium Biotechnologies Inc. is a leading developer, manufacturer and marketer of science-based products for the cosmetics, pharmaceutical, chemical and nutrition industries. Atrium 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 35 countries, primarily in North America, Europe and Asia. Additional information about Atrium is available on its Web site at www.atrium-bio.com.
Atrium 2005 Third Quarter Financial Information
Atrium’s 2005 Third Quarter Shareholder Report (which contains Atrium’s 2005 Third Quarter MD&A and unaudited consolidated financial statements) and other relevant financial information are available at www.atrium-bio.com in the “Investors” section. Atrium’s 2005 Third Quarter Shareholder Report is also available on the Web sites maintained by the Canadian securities regulators at www.sedar.com.
Conference Call and Webcast
Atrium will hold its quarterly conference call and webcast to discuss its third quarter results on November 9, 2005 at 10:00 a.m. Eastern time. Participants may access the call by using the following numbers: 416-640-4127, 514-807-8791 or 800-814-4859. A live webcast is also available via the Company’s website at www.atrium-bio.com in the “Investors” section. A replay of the webcast will also be available on our website for a period of 30 days.
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 financial expenses and income taxes (EBIT). This measure is directly derived from the Interim Consolidated Financial Statements for the quarter ended September 30, 2005 but does 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 Interim Consolidated Financial Statements for the quarter ended September 30, 2005 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 Prospectus for our Initial Public Offering (Management Discussion and Analysis) filed with 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.
<< Atrium Biotechnologies Inc. Summary of Consolidated Financial Statements (in millions of Canadian dollars except per share amounts) Consolidated Results for the 3-month periods ended September 30 (unaudited) 2005 2004 Change Revenues 52.9 41.0 29.0% Gross Margin (1) 14.3 12.6 13.4% 27.0% 30.7% EBIT (2) 6.4 6.5 -1.9% 12.1% 15.9% Net Earnings 3.7 2.8 34.3% Net earnings per share Basic 0.13 0.12 Diluted 0.12 0.12 Cash flow from operating activities before changes in non-cash operating working capital items 5.1 4.2 19.8% Consolidated Results for the 9-month periods ended September 30 (unaudited) 2005 2004 Change Revenues 174.6 133.8 30.4% Gross Margin (1) 47.4 39.5 20.2% 27.2% 29.5% EBIT (2) 22.7 20.0 13.4% 13.0% 15.0% Net Earnings 12.6 10.4 21.1% Net earnings per share Basic 0.46 0.46 Diluted 0.43 0.44 Cash flow from operating activities before changes in non-cash operating working capital items 17.3 13.7 26.4% Atrium Biotechnologies Inc. Summary of Consolidated Financial Statements (in millions of Canadian dollars) Consolidated Balance Sheet As at As at Sept. 30, Dec. 31, 2005 2004 (unaudited) (audited) Cash and Cash Equivalents and Short-term Investments 14.7 14.8 Current assets 77.0 69.1 Goodwill 78.5 74.1 Intangible assets and deferred charges 24.4 17.1 Total assets 187.6 167.0 Total debt 22.9 55.0 Non-controlling interest - 6.8 Shareholders’ equity 130.6 71.7 >> (1) Gross margin means sales less cost of goods sold; cost of goods sold does not include depreciation of production equipment. (2) EBIT means net earnings less (i) financial revenues and foreign exchange gain; and add (ii) interest expense, foreign exchange loss, income tax expense, non-controlling interest and loss on dilution of investment.
ATRIUM BIOTECHNOLOGIES INC.
CONTACT: Investor Relations: John Dempsey, Vice President, Finance andChief Financial Officer, (418) 652-1116 ext. 287, jdempsey@atrium-bio.com;Media Relations: Simon Poitras, HKDP, (418) 523-3352, ext. 239,spoitras@hkdp.qc.ca
