Atrium Innovations grows 11% in Q3

Atrium Innovations grows 11% in Q3

Foray into sports nutrition gives company a boost.

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 September 30, 2012.

Third Quarter 2012 highlights:
(All amounts are in US dollars)

  • Total revenue growth was all organic: 11 percent over last year, or 14 percent on a currency-neutral basis, to reach $107.6 million
  • Total branded revenue recorded solid organic growth of 13 percent, on a currency-neutral basis
  • EBITDA of $21.3 million or 19.8 percent of revenue, a decline mostly related to a lower Euro/USD exchange rate
  • Adjusted diluted EPS of $0.42 for the quarter, a slight increase of 2 percent over last year despite the unfavourable exchange rate
  • Cash flows before working capital and interest remain strong at $18.3 million
  • Closure of British Columbia manufacturing facility completed as planned
  • First-time launch of a new brand: Klean Athlete

"The results for the third quarter were in line with Management's outlook and reflect the continued focus and priority placed on organic growth across all our brands. Total branded revenue growth of 13 percent for the quarter over last year represents our best performance in over four years. The exceptional performance of Retail Branded in North America must be highlighted with growth of just over 40 percent over 2011. While total revenues in Europe were under pressure due to difficult economic conditions in the Netherlands, we continue to be pleased with our of Wobenzym sales in Germany as Wobenzym Plus continues to enjoy sell-out increases over last year," said Pierre Fitzgibbon, president and CEO.

"Our EBITDA margin improved slightly over the second quarter of 2012 to 19.8 percent and stands at 20.0 percent year-to-date. We expect the EBITDA margin to remain relatively stable in the fourth quarter when compared with the third quarter.

"In the quarter, Douglas Laboratories introduced a new brand, Klean Athlete, targeting a new high growth category ("sports nutrition") for Atrium. We made the decision to address the sports nutrition market via the development of an internal brand rather than through an acquisition. So far, the market reception has been very positive.

"Our industry continues to grow at a healthy pace. We are well positioned to take advantage of it, and our commitment to improving revenue from organic growth is showing tangible results. We will focus throughout 2013 on optimizing our U.S. manufacturing environment as we complete the implementation of our ERP program", concluded Mr. Fitzgibbon.

For the quarter ended September 30, 2012, Atrium recorded revenues of $107.6 million representing an increase of 11 percent (14 percent on a currency-neutral basis) compared to revenues of $97.0 million in 2011. The increase, all organic, is mainly attributable to the solid performance of our branded products with organic growth of 13 percent including solid momentum of HCP and HFS brands and also to the private label products.

EBITDA for the quarter was $21.3 million or 19.8 percent of revenues compared to $22.4 million or 23.1 percent of revenues for the same period in 2011. The EBITDA decreased by $1.1 million year over year largely explained by the unfavourable euro/USD exchange rate with an impact of $0.8 million.

Net earnings attributable to shareholders were $13.4 million for the third quarter in 2012 compared to $13.4 million in 2011, while net earnings per share ("EPS") on a diluted basis were $0.40 per share, as compared to $0.38 per share for the same period in 2011. The adjusted diluted EPS were $0.42 in 2012 compared to adjusted diluted EPS of $0.41 in 2011.

Cash flows from operating activities before changes in non-cash working capital items and interest expenses were $18.3 million compared to $19.2 million in 2011. As at September 30, 2012, the Company had a total debt of $285.0 million and a cash position of $13.7 million.

"Over the past four quarters, we have taken advantage of what we believe is an attractive valuation of our shares to use our Normal Course Issuer bid (NCIB) program and thereby reduce the number of outstanding shares by over 1.2 million to the benefit of our shareholders. Considering our solid and stable cash flows, we remain comfortable with our balance sheet and debt level," said Mario Paradis, vice president and CFO.


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