Atrium Innovations Reports First Quarter 2010 Results
Solid Performance with Particular Strength in the U.S.
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>>Quebec City (Quebec), May 10, 2010 – Atrium Innovations Inc. (TSX: ATB), a recognized leading developer, manufacturer and marketer of professionally endorsed, science-based products for the health and nutrition industry, today released its financial results for the first quarter of 2010.
First Quarter Highlights:
(All amounts are in US dollars)- Revenue and EBITDA growth of 27.5% and 19.5%
- Double digit growth of the U.S. branded business
- EBITDA of $21.2 million or 23.5% of revenues
- Net earnings of $13.0 million up 22.8%
- EPS of $0.39, up from $0.32 last year
- Acquisition of Trophic Canada, a leading manufacturer and distributor of nutritional supplements in the Canadian health food store market
“Our solid first quarter was driven by the effect of the acquisition of Garden of Life and the strong momentum of our branded businesses, particularly in the U.S. market. European market conditions remained generally stable,” said Pierre Fitzgibbon, President and Chief Executive Officer. “The acquisition of Trophic Canada during the quarter added a leading brand to our portfolio and the missing component to spearhead a broader and more aggressive growth strategy to enhance our share of the Canadian market. The integration process is well underway and is progressing on schedule.
“Our worldwide deployment strategy for Wobenzym is progressing very well as evidenced by the revenue growth we experienced with our Wobenzym products in the U.S., the Central Eastern European countries, and recently Italy. However, total sales of Wobenzym decreased slightly due to the transition period in Germany where the shift to Wobenzym P has presented some challenges. We are confident that our multi-product strategy will maintain and widen the consumer appeal of Wobenzym.”
“We expect continued growth in our U.S. branded business, supported by strong industry fundamentals. We have reached a point in the evolution of our business model where our revenues and operations are now well diversified,” concluded Mr. Fitzgibbon.
For the first quarter ended March 31, 2010, Atrium recorded revenues of $90.1 million representing an increase of 27.5% compared to revenues of $70.6 million for the corresponding period in 2009. The increase is mainly attributable to the acquisition of Garden of Life, and to organic growth of branded product businesses. Excluding the positive impact of the euro/US dollar exchange rate when we compared to the corresponding period last year, revenues would have increased by 25.1%.
Gross profit for the first quarter was $51.6 million compared to $38.5 million for 2009, an increase of $13.1 million or 34.0%. The increase in gross profit is primarily attributable to the acquisition of Garden of Life and to organic growth. For the first quarter, gross margin increased from 54.5% in 2009 to 57.3% in 2010. The gross margin increased due to the more favorable business mix of revenues and the integration of our Berlin manufacturing plant.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the first quarter of 2010 increased by 19.5% to $21.2 million or 23.5% of revenue compared to $17.7 million or 25.1% of revenues for the same period in 2009. Excluding the impact of the euro/US dollar exchange rate, EBITDA would have increased by 16.6%.
Net earnings for the quarter were $13.0 million compared to $10.6 million in 2009, representing an increase of 22.8%. EPS for the quarter were $0.39 per diluted share compared to $0.32 per diluted share in 2009.
Cash flows from operating activities before changes in non-cash working capital items were $14.5 million in 2010, an increase of 24.2% compared to $11.6 million in 2009. As at March 31, 2010, the Company had a total debt of $185.2 million and a cash position of $10.5 million. The Company has a revolving credit facility that provides $300 million of borrowing capacity with no debt refinancing before July 2012.
About Atrium
Atrium Innovations Inc. is a globally recognized leader in the innovation, formulation, production and commercialization 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 925 employees and operates eight manufacturing facilities. Additional information about Atrium is available on its website at www.atrium-innovations.com.
Conference Call and Webcast
Atrium will hold its quarterly conference call and webcast to discuss its 2010 first quarter results on Tuesday, May 11, 2010 at 8:00 a.m., Eastern time. Participants may access the call by using the following numbers: 514 807-9895, 888 231-8191 or 647 427-7450. A live webcast is also available via the Company’s website at www.atrium-innovations.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.
Investor Relations:
Mario Paradis
Vice President and Chief Financial Officer
Tel.: 418 652-1116
mp@atrium-innovations.com
Media Relations:
Frédéric Tremblay
Edelman
Tel.: 514 844-6665, ext. 231
frederic.tremblay@edelman.com
Pierre Boucher
MaisonBrison
Tel.: 514 731-0000, ext. 237
pierre@maisonbrison.com