Atrium Innovations reports solid Q2

Atrium Innovations reports solid Q2

Total revenue grew 4.1 percent over last year, or 7.4 percent on a currency-neutral basis, all organic, to reach $109.5 million.

Atrium Innovations Inc. (TSX: ATB), a globally recognized leader in the development, manufacturing and commercialization of innovative, science-based dietary supplements endorsed by health professionals, today released its results for the quarter ended June 30, 2012.

Second Quarter 2012 Highlights:
(All amounts are in US dollars)

  • Total revenue growth of 4.1 percent over last year, or 7.4 percent on a currency-neutral basis, all organic, to reach $109.5 million
  • Total branded revenue recorded solid organic growth of 12.2 percent
  • EBITDA of $21.3 million or 19.5 percent of revenue, reflecting investments in marketing
  • Adjusted diluted EPS of $0.38 for the quarter
  • Cash flows before working capital, interest and after restructuring costs remain strong at $17.8 million

"We posted solid organic growth on a global basis with a particularly strong performance from our branded products at 12.2 percent, reflecting solid momentum in the HCP and Retail channels in North America. While our European operations faced some headwinds from the weak general economy, we are pleased by the 3.7 percent growth rate (currency neutral) recorded for the quarter. Overall, revenues surpassed our expectations given the expected decrease in our Retail Private Label business," said Pierre Fitzgibbon, President and CEO.

"Lower EBITDA margin for the quarter reflects a growth rate at Garden of Life well above the industry. In addition, significant investments in mailers were made at Nutri-Health which caused a negative EBITDA. As a result, we are currently reviewing the traditional mailing business model.

"Aligned with our right-sizing initiatives, we have decided to close our manufacturing operations in Penticton, British Columbia by the end of September 2012. Production is in the process of being transferred to our other manufacturing facilities.

"As indicated over the past year, we face heightened pressure from a regulatory perspective. Associated expenses to elevate our cGMP standards have and will continue to impact margins. However, we are seeing evidence that the industry dynamic is changing which will allow overtime recovering part of these regulatory expenses," concluded Mr. Fitzgibbon.

For the quarter ended June 30, 2012, Atrium recorded revenues of $109.5 million representing an increase of 4.1 percent (7.4 percent on a currency-neutral basis) compared to revenues of $105.2 million in 2011. The increase, all organic, is mainly attributable to the solid performance of our branded products with organic growth of 12.2 percent including solid momentum of HCP and HFS brands partially offset by revenue decreases from the Private Label businesses, and also the unfavourable impact of exchange rates.

EBITDA for the quarter was $21.3 million or 19.5 percent of revenues compared to $23.8 million or 22.6 percent of revenues for the same period in 2011. The EBITDA margin decreased by 3.1 percent year over year and is largely explained by a decline in the gross margin related to product mix, additional investments in marketing in the retail branded segment and the euro/US dollar exchange rate with an unfavourable impact of $0.9 million.

Net earnings attributable to shareholders were $12.2 million for the second quarter in 2012 compared to $14.4 million in 2011, while net earnings per share ("EPS") on a diluted basis were $0.36 per share, as compared to $0.44 per share for the same period in 2011. The adjusted diluted EPS were $0.38 in 2012 compared to diluted EPS of $0.44 in 2011.

Cash flows from operating activities before changes in non-cash working capital items, interest expenses and restructuring costs were $17.8 million, compared to $18.9 million in 2011. As at June 30, 2012, the Company had a total debt of $281.4 million and a cash position of $11.6 million.


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