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, released its 2011 first quarter results for the period ended March 31, 2011.
2011 Highlights: (All amounts are in US dollars.)
Revenue growth of 19.7% over previous year to reach $107.8 million
Strong contribution of Seroyal acquisition with integration progressing very well
Branded organic growth reached 6.4%
EBITDA of $23.4 million or 21.7% of revenues, an increase of 10.3% compared to last year
Diluted EPS of $0.43 for the quarter
Cash flow before working capital was up 23.7% to $18.8 million.
"During the quarter, we successfully progressed with the integration of Seroyal and started to implement a new management structure to support our next growth phase," said Pierre Fitzgibbon, President and Chief Executive Officer. "We experienced strong revenue growth of 19.7% this quarter. We also want to highlight the solid global organic performance of all our branded products which, combined, achieved 6.4% growth during the quarter".
"As expected, the EBITDA margin during the quarter was somewhat negatively impacted by above normal levels of selling, general & administrative expenses, reflecting our intense marketing initiatives in Germany. We are pleased by the positive impact that our marketing campaign is having on revenues and the progress made in restoring our market share. At this stage we decided to maintain current investments in marketing in the second half of 2011 to fully secure our rebuilding efforts of the past few quarters. Consequently, we are reducing the guidance of our EBITDA margin range by 1%, to 23%-24%."
"Our first quarter results have reached record levels on several financial metrics. The industry fundamentals enjoy solid momentum, particularly in North America, and Atrium is benefiting. 2011 will be a strong year and we remain committed to investing in our business to achieve our goals," concluded Mr. Fitzgibbon.
For the quarter ended March 31, 2011, Atrium recorded revenues of $107.8 million representing an increase of 19.7% compared to revenues of $90.1 million in 2010. This increase is mainly attributable to the acquisition of Seroyal as well as to organic growth of the Company's branded business.
EBITDA increased by 10.3% to $23.4 million or 21.7% of revenues compared to $21.2 million or 23.5% of revenues for the same period in 2010. The acquisitions of Seroyal, Trophic and Minami contributed to the increase in EBITDA.
Net earnings attributable to shareholders were $14.1 million in 2011 compared to $12.4 million in 2010, representing an increase of 13.6%. Net earnings per share ("EPS") on a diluted basis rose to $0.43 per share, as compared to $0.37 per share for the same period in 2010.
Cash flows from operating activities before changes in non-cash working capital items were $18.8 million compared to $15.2 million in 2010. As at March 31, 2011, the Company had a total debt of $313.3 million and a cash position of $18.3 million. Subsequent to quarter-end under an option of its credit agreement, the Company has increased the authorized amount of its revolving credit facility from $300 million to $325 million of which approximately $26 million is available.
"Cash flow before working capital reached a record level of $18.8 million during the quarter, an increase of 23.7% over the same period last year," said Mario Paradis, Chief Financial Officer of the Company. "During the first quarter, we opted to expand our borrowing capacity to provide us with greater financial flexibility. From December 31, 2010 and the end of the first quarter, the strength of the Euro over the US dollars resulted in an increase of $13 million in our long-term debt denominated in euro. In mid- November 2010, our normal course issuer bid became effective and 100,000 shares were acquired under this program during the first quarter of 2011. Subsequent to the quarter end, an additional amount of 20,200 shares was acquired. Considering our strong and steady cash flow, we remain comfortable with our financial position and ratios."
Atrium Innovations Inc. is a globally recognized leader in the development, manufacturing, and commercialization of innovative, science-based natural health products endorsed by health professionals. The Company distributes its extensive portfolio of products mainly in the healthcare practitioner and health food and specialized store channels, with a primary focus in North America and Europe. Atrium is at the forefront of science, innovation and education in the dietary supplement industry. The Company has over 1,000 employees and operates seven manufacturing facilities. Additional information is available at www.atrium-innovations.com.
Caution Regarding Non-IFRS Financial Measures
The Company provides non-IFRS financial measures (gross profit*, EBIT*, and EBITDA*) as supplemental information regarding its operational performance. These non-IFRS financial measures are directly derived from the Company's financial statements and are presented in a consistent manner. The Company uses these measures for the purposes of evaluating its historical and prospective financial performance, as well as its performance relative to competitors. These measures also help the Company to plan and forecast for future periods as well as to make operational and strategic decisions. The Company believes that providing this information to investors, in addition to IFRS measures, allows them to see the Company's results through the eyes of management, and to better understand its historical and future financial performance.
The presentation of this additional information is not prepared in accordance with IFRS. Therefore, the information may not necessarily be comparable to that of other companies and should be considered as a supplement to, not a substitute for, or superior to, the comparable measures calculated in accordance with IFRS.
* Gross profit means sales less cost of sales. EBIT means earnings before interest and tax. EBITDA means earnings before interest, tax, depreciation, amortization and acquisitions costs.