Knight Therapeutics Inc. (TSX: GUD) ("Knight" or “the Company”), a
leading pan- American (ex-US) specialty pharmaceutical company,
today reported financial results for its second quarter ended June
30, 2024. All currency amounts are in thousands except for share
and per share amounts. All currencies are Canadian unless otherwise
specified.
Q2 2024
Highlights
Financial Results
- Delivered record revenues of $95,573, an increase of $5,668 or
6% over the same period in prior year driven by growth of our key
promoted products partly offset by our mature products.
- Gross margin of $47,337 or 50% of revenues compared to $37,493
or 42% of revenues in the same period in prior year.
- Adjusted EBITDA1 was $15,744, an increase of $1,475 or 10% over
the same period in prior year.
- Adjusted EBITDA per share1 of $0.16, an increase of $0.03 or
23% over the same period in prior year.
- Net loss was $1,942, compared to net income of $1,840 in the
same period in the prior year.
- Cash outflow from operations was $1,086, compared to $1,486 in
the same period in prior year.
Corporate Developments
- Completed the NCIB launched in July
2023 with a total purchase of 5,999,524 shares at an average price
of $4.87 for aggregate cash consideration of $29,231.
- Shareholders re-elected Jonathan Ross Goodman, Samira Sakhia,
James C. Gale, Robert N. Lande, Michael J. Tremblay, Nicolás Sujoy
and Janice Murray on the Board of Directors.
Products
- Entered into an exclusive supply and
distribution agreement for Jornay PM™ (methylphenidate HCI
extended-release capsules) for Canada and Latin America.
Subsequent to
quarter-end
- Launched a NCIB in July to purchase
up to 5,312,846 common shares of the Company over the next
year.
“I am excited to report that for the six months
ended June 30, 2024, we delivered record revenues of over $180
million and adjusted EBITDA of over $29 million. This strong
performance is the result of the growth of our key promoted
products and of our commercial execution across Canada and Latin
America. In addition, we have expanded and strengthened our
pipeline and will be leveraging our existing neurology
infrastructure with the in-licensing of Jornay PMTM, our third
neurology product added in the last nine months,” said Samira
Sakhia, President and Chief Executive Officer of Knight
Therapeutics Inc.
1 Adjusted EBITDA and Adjusted EBITDA per share are non-GAAP
measures. Refer to section Non-GAAP measures for additional
details.
|
SELECTED FINANCIAL RESULTS REPORTED UNDER IFRS[In
thousands of Canadian dollars] |
|
|
|
|
Change |
|
|
Change |
|
|
Q2-24 |
Q2-23 |
$1 |
|
%2 |
YTD-24 |
YTD-23 |
$1 |
|
%2 |
|
Revenues |
95,573 |
89,905 |
5,668 |
|
6 % |
182,177 |
172,502 |
9,675 |
|
6% |
|
Gross margin |
47,337 |
37,493 |
9,844 |
|
26% |
89,036 |
78,255 |
10,781 |
|
14% |
|
Gross margin % |
50% |
42% |
|
|
|
49% |
45% |
|
|
|
|
Selling and marketing |
13,264 |
12,874 |
(390 |
) |
3% |
25,913 |
23,539 |
(2,374 |
) |
10% |
|
General and administrative |
12,099 |
9,119 |
(2,980 |
) |
33% |
22,637 |
18,225 |
(4,412 |
) |
24% |
|
Research and development |
5,806 |
4,336 |
(1,470 |
) |
34% |
10,786 |
8,523 |
(2,263 |
) |
27% |
|
Amortization of intangible assets |
11,674 |
11,274 |
(400 |
) |
4% |
22,546 |
22,445 |
(101 |
) |
—% |
|
Operating expenses |
42,843 |
37,603 |
(5,240 |
) |
14% |
81,882 |
72,732 |
(9,150 |
) |
13% |
|
Operating income (loss) |
4,494 |
(110) |
4,604 |
|
4185% |
7,154 |
5,523 |
1,631 |
|
30% |
|
Net (loss) income |
(1,942) |
1,840 |
(3,782 |
) |
206% |
(6,488) |
(2,097) |
(4,391 |
) |
209% |
1 A positive variance represents a positive impact to net income
(loss) and a negative variance represents a negative impact to net
income (loss)2 Percentage change is presented in absolute
values
|
SELECTED FINANCIAL RESULTS EXCLUDING IAS 291[In
thousands of Canadian dollars] |
|
|
|
|
Change |
|
|
Change |
|
|
Q2-24 |
Q2-23 |
$ |
|
% |
YTD-24 |
YTD-23 |
$ |
|
% |
|
Revenues |
94,121 |
90,400 |
3,721 |
|
4% |
179,917 |
173,067 |
6,850 |
|
4% |
|
Gross margin |
45,281 |
40,244 |
5,037 |
|
13% |
85,977 |
81,630 |
4,347 |
|
5% |
|
Gross margin % |
48% |
45% |
|
|
|
48% |
47% |
|
|
|
Selling and marketing |
12,968 |
12,985 |
(17 |
) |
—% |
25,461 |
23,698 |
1,763 |
|
7% |
|
General and administrative |
11,578 |
9,188 |
2,390 |
|
26% |
21,790 |
18,075 |
3,715 |
|
21% |
|
Research and development |
5,577 |
4,623 |
954 |
|
21% |
10,417 |
8,725 |
1,692 |
|
19% |
|
Amortization of intangible assets |
11,699 |
11,189 |
510 |
|
5% |
22,545 |
22,314 |
231 |
|
1% |
|
Operating expenses |
41,822 |
37,985 |
3,837 |
|
10% |
80,213 |
72,812 |
7,401 |
|
10% |
|
EBITDA1 |
15,641 |
14,269 |
1,372 |
|
10% |
29,230 |
32,506 |
(3,276 |
) |
10% |
|
Adjusted EBITDA1 |
15,744 |
14,269 |
1,475 |
|
10% |
29,333 |
32,506 |
(3,173 |
) |
10% |
|
Adjusted EBITDA per share1 |
0.16 |
0.13 |
0.03 |
|
23% |
0.29 |
0.30 |
(0.01 |
) |
3% |
1 Financial results excluding the impact of IAS 29, EBITDA,
adjusted EBITDA and adjusted EBITDA per share are non-GAAP
measures. Refer to section “Non- GAAP measures” for additional
details.
RevenuesFor the quarter ended
June 30, 2024, revenues excluding the impact of IAS 29 were $94,121
an increase of $3,721 or 4% mainly driven by a growth of $7,125 or
11% from our key promoted products offset by a decline in our
mature products. The table below provides revenues by therapeutic
area.
|
|
Excluding the impact of IAS 291 |
|
|
|
|
Change |
|
Therapeutic Area |
Q2-24 |
Q2-23 |
$ |
|
% |
|
Oncology/Hematology |
35,625 |
27,935 |
7,690 |
|
28% |
|
Infectious Diseases |
37,824 |
45,567 |
(7,743 |
) |
17% |
|
Other Specialty |
20,672 |
16,898 |
3,774 |
|
22% |
|
Total |
94,121 |
90,400 |
3,721 |
|
4% |
1 Revenues excluding the impact of IAS 29 is a
non-GAAP measure, refer to section “Non-GAAP measures” for
additional details.
The increase in revenues is explained by the
following:
-
Oncology/Hematology: The oncology/hematology
portfolio grew by $7,690 due to the continued growth of key
promoted products including Lenvima®, Akynzeo®, Trelstar® and the
launch of Minjuvi® in Brazil.
-
Infectious Diseases: The infectious diseases
portfolio decreased by $7,743 driven mainly by the timing of orders
for Ambisome® under the MOH contract, a decrease in the demand of
Impavido® partly offset by the growth of our key promoted products
including Cresemba® and timing of orders for certain products.
During Q2-24 the Company delivered $8,900 of Ambisome® to MOH
compared to $18,000 in Q2-23.
- MOH
Contract: The Company signed a contract with the Ministry
of Health of Brazil for Ambisome® in December 2022 ("2022 MOH
Contract"). Knight delivered a total of $34,600 under the 2022 MOH
Contract as follows: $7,000 in 2022, $25,200 in 2023 ($2,400 in
Q1-23, $18,000 in Q2-23 and $4,800 in Q4-23) and $2,400 Q1-24. In
December 2023, Knight signed a new contract with the MOH ("2024 MOH
Contract") and delivered $6,800 in Q1-24 and $8,900 in Q2-24. The
total MOH sales Ambisome® delivered in Q2-24 and YTD-24 was $8,900
and $18,100, respectively.
-
Other Specialty: The other
specialty portfolio increased by $3,774, primarily driven by the
commercial transition of Exelon® from Novartis to Knight. As a
result of advanced purchases by certain customers in Q1-23, the
revenues of Exelon® were negatively impacted in Q2-23.
Gross
marginExcluding the impact of IAS 29, gross margin
as a percentage of revenues was 48% in Q2-24 compared to 45% in
Q2-23. The increase in the Q2-24 gross margin, as a percentage of
revenues, was due to product mix including a lower proportion of
Ambisome® sales to MOH.
Selling and
marketing ("S&M")
expenses: For the quarter ended June 30, 2024
S&M expenses excluding the impact of IAS 29, were $12,968 in
Q2-24 compared to $12,985 in Q2-23, a decrease of $17. There was no
significant variance.
General and
administrative ("G&A")
expenses: For the quarter ended June 30, 2024
G&A expenses excluding the impact of IAS 29, were $11,578 in
Q2-24 compared to $9,188 in Q2-23, an increase of $2,390 or 26%.
The increase was mainly driven by an increase in structure and
compensation expenses.
Research and
development ("R&D")
expenses: For the quarter ended June 30, 2024
R&D expenses excluding the impact of IAS 29, were $5,577 in
Q2-24 compared to 4,623 in Q2-23, an increase of $954 or 21%.
The increase was driven by an increase in product development
activities in connection with our pipeline products and medical
initiatives related to key promoted products. Knight invested $815
in Q2-24, an increase of $795 versus the prior year on its pipeline
development activities. All costs related to development activities
have been expensed which typically include regulatory submissions,
analytical method transfers, stability studies and bio equivalence
studies.
Adjusted
EBITDAFor the quarter ended June 30, 2024,
adjusted EBITDA increased by $1,475 or 10%. The increase was driven
by a higher gross margin partly offset by higher G&A expenses,
mainly related to structure and compensation increase and an
increase in R&D expenses mainly due to an increase in our
product development activities behind our pipeline.
|
SELECT BALANCE SHEET ITEMS[In
thousands of
Canadian dollars] |
|
|
June
30,2024 |
December
31,2023 |
Change |
|
|
$ |
|
% |
|
Cash, cash equivalents and marketable securities |
152,668 |
161,825 |
(9,157 |
) |
6% |
|
Trade and other receivables |
135,203 |
141,684 |
(6,481 |
) |
5% |
|
Inventories |
103,645 |
91,834 |
11,811 |
|
13% |
|
Financial assets |
115,728 |
128,369 |
(12,641 |
) |
10% |
|
Accounts payable and accrued liabilities |
84,821 |
90,617 |
(5,796 |
) |
6% |
|
Bank loans |
50,952 |
61,866 |
(10,914 |
) |
18% |
Cash, cash equivalents and marketable
securities: As at June 30, 2024, Knight had $152,668 in
cash, cash equivalents and marketable securities, a decrease of
$9,157 or 6% as compared to December 31, 2023. The decrease is
mainly due to the settlement of upfront and milestone payments in
connection with product licensing agreements including Qelbree™,
IPX203, Jornay PM™ and Cresemba®, principal and interest
payments on bank loans and repurchase of shares through the NCIB,
partly offset by the cash inflows from operations. The cash inflows
from operating activities were $29,795 driven by the operating
results adjusted for noncash items such as depreciation,
amortization as well as decrease in working capital of $3,576. The
decrease in working capital was mainly due to a decrease in
accounts receivable driven by the timing of collections from
customers and an increase in inventory excluding the impact of IAS
29 driven by the timing of sales and purchases of inventory.
Bank loans: As at June 30,
2024, bank loans were at $50,952, a decrease of $10,914 or 18% as
compared December 31, 2023 due to principal repayments of bank
loans as well as the depreciation of the Brazilian Real and
Colombian Pesos.
Corporate Updates
NCIB
On July 11, 2024, the Company announced that the
Toronto Stock Exchange approved its notice of intention to launch a
NCIB (“2024 NCIB”). Under the terms of the 2024 NCIB, Knight may
purchase for cancellation up to 5,312,846 common shares of the
Company which represented 10% of its public float as at June 30,
2024. The 2024 NCIB commenced on July 15, 2024 and will end on the
earlier of July 14, 2025 or when the Company completes its maximum
purchases under the NCIB. Furthermore, Knight entered into an
agreement with a broker to facilitate purchases of its common
shares under the NCIB.
During the three-month period ended June 30,
2024, the Company purchased 205,661 common shares at an average
price of $6.04 for aggregate cash consideration of $1,242 under the
2023 NCIB. Subsequent to the quarter-end up to July 31, 2024, the
Company purchased an additional 165,000 common shares at an average
purchase price of $5.67 for an aggregate cash consideration of
$936.
The Company has purchased an aggregate of 42.5 million shares at
an average price of $5.70 since the launch of its share buy back
program in 2019.
Financial Outlook
Update
Financial Outlook
Knight provides guidance on revenues on a non-GAAP basis. This
is due to both the difficulty in predicting Argentinian inflation
rates and its IAS 29 impact.
For fiscal 2024, Knight has increased its
financial guidance on revenues and now expects to generate between
$355 million to $365 million in revenues up from $335 to
$350 million. The adjusted EBITDA1 is expected to be approximately
16% of revenues. The change in the financial outlook is primarily
due to an improvement in forecasted LATAM currencies against the
Canadian dollar as well as an acceleration of investments on our
pipeline products. The guidance is based on a number of
assumptions, including but not limited to the following:
- no revenues or expenses for business
development transactions not completed as at August 7, 2024
- no unforeseen termination to our
license, distribution & supply agreements
- no interruptions in supply whether
due to global supply chain disruptions or general manufacturing
issues
- no new generic entrants on our key
pharmaceutical brands
- no unforeseen changes to government
mandated pricing regulations
- successful commercial execution on
product listing arrangements with HMOs, insurers, key accounts, and
public payers
- successful execution and uptake of
newly launched products
- no material increase in provisions
for inventory or trade receivables
- no significant variations of
forecasted foreign currency exchange rates
- inflation remaining within
forecasted ranges
Should any of the assumptions differ, the financial outlook and
the actual results may vary materially. Refer to the risks and
assumptions referred to in the Forward-Looking Statements section
of this news release for further details.
1 Revenues excluding the impact of IAS 29 and adjusted EBITDA
are a non-GAAP measure. Refer to the definitions in section
“Non-GAAP measures” for additional details.
Conference Call
Notice
Knight will host a conference call and audio webcast to discuss
its second quarter ended June 30, 2024, today at 8:30 am ET. Knight
cordially invites all interested parties to participate in this
call.
Date: Thursday, August 8,
2024Time: 8:30 a.m. ETTelephone:
Toll Free: 1-800-836-8184 or International
1-289-819-1350Webcast: www.knighttx.com or
WebcastThis is a listen-only audio webcast. Media Player is
required to listen to the broadcast.
Replay: An archived replay will be available
for 30 days at www.knighttx.com
About Knight
Therapeutics Inc.
Knight Therapeutics Inc., headquartered in
Montreal, Canada, is a specialty pharmaceutical company focused on
acquiring or in-licensing and commercializing pharmaceutical
products for Canada and Latin America. Knight's Latin American
subsidiaries operate under United Medical, Biotoscana Farma and
Laboratorio LKM. Knight Therapeutics Inc.'s shares trade on TSX
under the symbol GUD. For more information about Knight
Therapeutics Inc., please visit the Company's web site at
www.knighttx.com or www.sedarplus.ca.
Forward-Looking Statement
This document contains forward-looking
statements for Knight Therapeutics Inc. and its subsidiaries. These
forward-looking statements, by their nature, necessarily involve
risks and uncertainties that could cause actual results to differ
materially from those contemplated by the forward-looking
statements. Knight Therapeutics Inc. considers the assumptions on
which these forward-looking statements are based to be reasonable
at the time they were prepared but cautions the reader that these
assumptions regarding future events, many of which are beyond the
control of Knight Therapeutics Inc. and its subsidiaries, may
ultimately prove to be incorrect. Factors and risks, which could
cause actual results to differ materially from current expectations
are discussed in Knight Therapeutics Inc.'s Annual Report and in
Knight Therapeutics Inc.'s Annual Information Form for the year
ended December 31, 2023 as filed on www.sedarplus.ca. Knight
Therapeutics Inc. disclaims any intention or obligation to update
or revise any forward-looking statements whether because of new
information or future events, except as required by law.
CONTACT
INFORMATION:
|
Investor Contact: |
|
| Knight Therapeutics Inc. |
|
| Samira Sakhia |
Arvind Utchanah |
| President & Chief Executive Officer |
Chief Financial Officer |
| T: 514.484.4483 |
T. +598.2626.2344 |
| F: 514.481.4116 |
|
| Email: IR@knighttx.com |
Email: IR@knighttx.com |
| Website: www.knighttx.com |
Website: www.knighttx.com |
NON-GAAP
MEASURES[In thousands of Canadian dollars]
The Company discloses non-GAAP measures and
ratios that do not have standardized meanings prescribed by IFRS.
The Company believes that shareholders, investment analysts and
other readers find such measures helpful in understanding the
Company’s financial performance. Non-GAAP financial measures and
adjusted EBITDA per share ratio do not have any standardized
meaning prescribed by IFRS and may not have been calculated in the
same way as similarly named financial measures presented by other
companies.
The Company uses the following non-GAAP
measures.
Revenues and
Financial results
excluding the
impact of
hyperinflation under
IAS 29
The Company applies IAS 29, Financial Reporting
in Hyperinflation Economies, as the Company's Argentine
subsidiaries used the Argentine Peso as their functional currency.
IAS 29 requires that the financial statements of an entity whose
functional currency is the currency of a hyperinflationary economy
be adjusted based on an appropriate general price index to express
the effects of inflation.
Revenues and financial results under IFRS are
adjusted to remove the impact of hyperinflation under IAS 29. The
impact of hyperinflation under IAS 29 is calculated by applying an
appropriate general price index to express the effects of
inflation. After applying the effects of translation, the statement
of income is converted using the closing foreign exchange rate of
the month.
Revenues and financial results excluding the
impact of hyperinflation under IAS 29 allow results to be viewed
without the impact of IAS 29 thereby facilitating the comparison of
results period over period. The presentation of revenues and
financial results excluding the impact of hyperinflation under IAS
29 is considered to be a non-GAAP measure and does not have any
standardized meaning under GAAP. As a result, the information
presented may not be comparable to similar measures presented by
other companies.
The following tables are reconciliations of
financial results under IFRS to financial results excluding the
impact of hyperinflation under IAS 29.
|
|
Q2-24 |
YTD-24 |
|
|
Reported under IFRS |
IAS 29 Adjustment |
|
Excluding the Impact
of IAS
29 |
Reported under IFRS |
IAS 29 Adjustment |
|
Excluding the Impact
of IAS
29 |
|
Revenues |
95,573 |
(1,452 |
) |
94,121 |
182,177 |
(2,260 |
) |
179,917 |
|
Cost of goods sold |
48,236 |
604 |
|
48,840 |
93,141 |
799 |
|
93,940 |
|
Gross margin |
47,337 |
(2,056 |
) |
45,281 |
89,036 |
(3,059 |
) |
85,977 |
|
Gross margin (%) |
50% |
|
|
48% |
49% |
|
|
48% |
|
Expenses |
|
|
|
|
|
|
|
|
|
Selling and marketing |
13,264 |
(296 |
) |
12,968 |
25,913 |
(452 |
) |
25,461 |
|
General and administrative |
12,099 |
(521 |
) |
11,578 |
22,637 |
(847 |
) |
21,790 |
|
Research and development |
5,806 |
(229 |
) |
5,577 |
10,786 |
(369 |
) |
10,417 |
|
Amortization of intangible assets |
11,674 |
25 |
|
11,699 |
22,546 |
(1 |
) |
22,545 |
|
Operating income
(loss) |
4,494 |
(1,035 |
) |
3,459 |
7,154 |
(1,390 |
) |
5,764 |
|
|
Q2-23 |
YTD-23 |
|
|
Reported under IFRS |
IAS 29Adjustment |
Excluding the Impact of IAS 29 |
Reported under IFRS |
IAS 29Adjustment |
Excluding the Impact of IAS 29 |
|
Revenues |
89,905 |
495 |
90,400 |
172,502 |
565 |
173,067 |
|
Cost of goods sold |
52,412 |
(2,256) |
50,156 |
94,247 |
(2,810) |
91,437 |
|
Gross margin |
37,493 |
2,751 |
40,244 |
78,255 |
3,375 |
81,630 |
|
Gross margin (%) |
42% |
|
45% |
45% |
|
47% |
|
Expenses |
|
|
|
|
|
|
|
Selling and marketing |
12,874 |
111 |
12,985 |
23,539 |
159 |
23,698 |
|
General and administrative |
9,119 |
69 |
9,188 |
18,225 |
(150) |
18,075 |
|
Research and development |
4,336 |
287 |
4,623 |
8,523 |
202 |
8,725 |
|
Amortization of intangible assets |
11,274 |
(85) |
11,189 |
22,445 |
(131) |
22,314 |
|
Operating income |
(110) |
2,369 |
2,259 |
5,523 |
3,295 |
8,818 |
Revenues and
Financial results
at constant
currencyRevenues and financial results at constant
currency are obtained by translating the prior period revenues and
financial results from the functional currencies to CAD using the
conversion rates in effect during the current period. Furthermore,
with respect to Argentina, the Company excludes the impact of
hyperinflation and translates the revenues and results at the
average exchange rate in effect for each of the periods.
Revenues and financial results at constant
currency allow results to be viewed without the impact of
fluctuations in foreign currency exchange rates thereby
facilitating the comparison of results period over period. The
presentation of revenues and financial results under constant
currency is considered to be a non-GAAP measure and does not have
any standardized meaning under GAAP. As a result, the information
presented may not be comparable to similar measures presented by
other companies.
The following tables are reconciliations of
financial results under IFRS to financial results and financial
results at constant currency.
|
Q2-23 |
YTD-23 |
|
|
Reported under IFRS |
|
IAS 29Adjustment |
|
Constant Currency Adjustment |
|
Constant Currency |
Reported under IFRS |
IAS 29Adjustment |
|
Constant Currency Adjustment |
Constant Currency |
|
Revenues |
89,905 |
|
495 |
|
112 |
|
90,512 |
172,502 |
565 |
|
3,592 |
176,659 |
|
Cost of goods sold |
52,412 |
|
(2,256 |
) |
(224 |
) |
49,932 |
94,247 |
(2,810 |
) |
1,453 |
92,890 |
|
Gross margin |
37,493 |
|
2,751 |
|
336 |
|
40,580 |
78,255 |
3,375 |
|
2,139 |
83,769 |
|
Expenses |
|
|
|
|
|
|
|
|
|
Selling and marketing |
12,874 |
|
111 |
|
(53 |
) |
12,932 |
23,539 |
159 |
|
205 |
23,903 |
|
General and administrative |
9,119 |
|
69 |
|
301 |
|
9,489 |
18,225 |
(150 |
) |
501 |
18,576 |
|
Research and development |
4,336 |
|
287 |
|
20 |
|
4,643 |
8,523 |
202 |
|
96 |
8,821 |
|
Amortization of intangible assets |
11,274 |
|
(85 |
) |
233 |
|
11,422 |
22,445 |
(131 |
) |
128 |
22,442 |
|
Operating income |
(110 |
) |
2,369 |
|
(165 |
) |
2,094 |
5,523 |
3,295 |
|
1,209 |
10,027 |
EBITDA
EBITDA is defined as operating income or loss
adjusted to exclude amortization and impairment of intangible
assets, depreciation, purchase price allocation accounting
adjustments, and the impact of IAS 29 (accounting under
hyperinflation) but to include costs related to leases.
EBITDA allows results to be viewed without the
impact of amortization and impairment of intangible assets,
depreciation, purchase price allocation accounting adjustments, and
the impact of IAS 29 (accounting under hyperinflation) but to
include costs related to leases fluctuations in foreign currency
exchange rates thereby facilitating the comparison of results
period over period. The presentation of EBITDA is considered to be
a non-GAAP measure and does not have any standardized meaning under
GAAP. As a result, the information presented may not be comparable
to similar measures presented by other companies.
Adjusted EBITDA
Adjusted EBITDA is defined EBITDA adjusted for
acquisition costs and non-recurring expenses.
Adjusted EBITDA allows results to be viewed
without the impact of amortization and impairment of intangible
assets, depreciation, purchase price allocation accounting
adjustments, and the impact of IAS 29 (accounting under
hyperinflation), acquisition costs and non-recurring expenses but
to include costs related to leases fluctuations in foreign currency
exchange rates thereby facilitating the comparison of results
period over period. The presentation of adjusted EBITDA is
considered to be a non-GAAP measure and does not have any
standardized meaning under GAAP. As a result, the information
presented may not be comparable to similar measures presented by
other companies.
The following table is a reconciliation of
operating income (loss) to EBITDA and adjusted EBITDA.
|
|
Q2-24 |
|
Q2-23 |
|
YTD-24 |
|
YTD-23 |
|
|
Operating income
(loss) |
4,494 |
|
(110 |
) |
7,154 |
|
5,523 |
|
|
Adjustments to operating income (loss): |
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
11,674 |
|
11,274 |
|
22,546 |
|
22,445 |
|
|
Depreciation of property, plant and equipment and ROU assets |
1,495 |
|
884 |
|
3,204 |
|
2,796 |
|
|
Lease costs (IFRS 16 adjustment) |
(982 |
) |
(636 |
) |
(1,864 |
) |
(1,367 |
) |
|
Impact of IAS 29 |
(1,040 |
) |
2,857 |
|
(1,810 |
) |
3,109 |
|
|
EBITDA |
15,641 |
|
14,269 |
|
29,230 |
|
32,506 |
|
|
Acquisition and transition costs |
103 |
|
— |
|
103 |
|
— |
|
|
Adjusted EBITDA |
15,744 |
|
14,269 |
|
29,333 |
|
32,506 |
|
Adjusted EBITDA
per share
Adjusted EBITDA per share is defined as Adjusted
EBITDA over number of common shares outstanding at the end of the
respective period. The presentation of adjusted EBITDA per share is
considered to be a non-GAAP ratio and does not have any
standardized meaning under GAAP. As a result, the information
presented may not be comparable to similar measures presented by
other companies.
The following table calculates adjusted EBITDA
per share as follows:
|
|
Q2-24 |
Q2-23 |
YTD-24 |
YTD-23 |
|
Adjusted EBITDA |
15,744 |
14,269 |
29,333 |
32,506 |
|
Adjusted EBITDA per common share |
0.16 |
0.13 |
0.29 |
0.30 |
|
Number of common shares outstanding at period end (in
thousands) |
101,327 |
107,177 |
101,327 |
107,177 |
|
SELECTED FINANCIAL RESULTS AT CONSTANT CURRENCY[In
thousands of Canadian
dollars] |
|
|
Excluding impact of IAS 29 |
|
|
|
Constant Currency1 |
Change |
|
Constant Currency1 |
Change |
|
|
Q2-24 |
Q2-23 |
$ |
|
% |
YTD-24 |
YTD-23 |
$ |
|
% |
|
Revenues |
94,121 |
90,512 |
3,609 |
|
4% |
179,917 |
176,659 |
3,258 |
|
2% |
|
Gross margin |
45,281 |
40,580 |
4,701 |
|
12% |
85,977 |
83,769 |
2,208 |
|
3% |
|
Gross margin % |
48% |
45% |
|
|
48 % |
47 % |
|
|
|
Operating expenses |
41,822 |
38,486 |
(3,336 |
) |
9% |
80,213 |
73,742 |
(6,471 |
) |
9% |
|
EBITDA |
15,641 |
14,227 |
1,414 |
|
10% |
29,230 |
33,915 |
(4,685 |
) |
14% |
|
Adjusted EBITDA |
15,744 |
14,227 |
1,517 |
|
11% |
29,333 |
33,915 |
(4,582 |
) |
14% |
|
Adjusted EBITDA per share |
0.16 |
0.13 |
0.03 |
|
23% |
0.29 |
0.31 |
(0.02 |
) |
6% |
1 Financial results at constant currency is a non-GAAP measure.
Refer to section “Non-GAAP measures” for additional details.
|
INTERIM CONSOLIDATED BALANCE SHEETS[In
thousands of Canadian dollars][Unaudited] |
|
As at |
June 30,
2024 |
December 31, 2023 |
|
ASSETS |
|
|
|
Current |
|
|
|
Cash and cash equivalents |
60,807 |
58,761 |
|
Marketable securities |
88,028 |
95,657 |
|
Trade receivables |
84,976 |
88,722 |
|
Other receivables |
5,835 |
7,427 |
|
Inventories |
103,645 |
91,834 |
|
Prepaids and deposits |
4,601 |
4,881 |
|
Other current financial assets |
8,631 |
15,753 |
|
Income taxes receivable |
4,087 |
2,080 |
|
Total current
assets |
360,610 |
365,115 |
|
Marketable securities |
3,833 |
7,407 |
|
Prepaids and deposits |
7,283 |
7,767 |
|
Right-of-use assets |
6,673 |
6,190 |
|
Property, plant and equipment |
14,814 |
11,669 |
|
Intangible assets |
295,548 |
289,960 |
|
Goodwill |
84,604 |
79,844 |
|
Other financial assets |
107,097 |
112,616 |
|
Deferred income tax assets |
20,510 |
19,390 |
|
Other long-term receivables |
44,392 |
45,535 |
|
Total non-current
assets |
584,754 |
580,378 |
|
Total assets |
945,364 |
945,493 |
|
INTERIM CONSOLIDATED BALANCE SHEETS (continued)[In
thousands of Canadian dollars][Unaudited] |
|
As at |
June 30,
2024 |
December 31, 2023 |
|
LIABILITIES AND
EQUITY |
|
|
|
Current |
|
|
|
Accounts payable and accrued liabilities |
77,808 |
85,366 |
|
Lease liabilities |
2,569 |
1,728 |
|
Other liabilities |
1,801 |
1,046 |
|
Bank loans |
16,988 |
17,850 |
|
Income taxes payable |
918 |
1,182 |
|
Other balances payable |
5,745 |
6,857 |
|
Total current
liabilities |
105,829 |
114,029 |
|
Accounts payable and accrued liabilities |
7,013 |
5,251 |
|
Lease liabilities |
4,587 |
5,497 |
|
Bank loans |
33,964 |
44,016 |
|
Other balances payable |
26,222 |
27,012 |
|
Deferred income tax liabilities |
4,948 |
2,817 |
|
Total liabilities |
182,563 |
198,622 |
|
Shareholders' equity |
|
|
|
Share capital |
540,945 |
540,046 |
|
Warrants |
117 |
117 |
|
Contributed surplus |
25,662 |
25,991 |
|
Accumulated other comprehensive income |
51,820 |
29,829 |
|
Retained earnings |
144,257 |
150,888 |
|
Total shareholders'
equity |
762,801 |
746,871 |
|
Total liabilities
and shareholders'
equity |
945,364 |
945,493 |
|
INTERIM CONSOLIDATED STATEMENTS OF INCOME
(LOSS) |
|
[In thousands of Canadian dollars, except for share and per share
amounts] |
|
[Unaudited] |
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
95,573 |
|
89,905 |
|
182,177 |
|
172,502 |
|
|
Cost of goods sold |
48,236 |
|
52,412 |
|
93,141 |
|
94,247 |
|
|
Gross margin |
47,337 |
|
37,493 |
|
89,036 |
|
78,255 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
Selling and marketing |
13,264 |
|
12,874 |
|
25,913 |
|
23,539 |
|
|
General and administrative |
12,099 |
|
9,119 |
|
22,637 |
|
18,225 |
|
|
Research and development |
5,806 |
|
4,336 |
|
10,786 |
|
8,523 |
|
|
Amortization of intangible assets |
11,674 |
|
11,274 |
|
22,546 |
|
22,445 |
|
|
Operating income (loss) |
4,494 |
|
(110 |
) |
7,154 |
|
5,523 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income on financial instruments measured at amortized
cost |
(1,960 |
) |
(2,015 |
) |
(4,096 |
) |
(4,194 |
) |
|
Other interest income |
(624 |
) |
(1,072 |
) |
(1,129 |
) |
(2,245 |
) |
|
Interest expense |
2,284 |
|
3,004 |
|
4,861 |
|
5,795 |
|
|
Other expense |
(42 |
) |
(310 |
) |
(211 |
) |
(216 |
) |
|
Net loss (gain) on financial instruments measured at fair value
through profit or loss |
665 |
|
(3,939 |
) |
16,932 |
|
7,908 |
|
|
Foreign exchange loss (gain) |
5,542 |
|
4,918 |
|
3,608 |
|
4,845 |
|
|
Gain on hyperinflation |
(2,084 |
) |
(908 |
) |
(6,380 |
) |
(1,636 |
) |
|
(Loss) income before income taxes |
713 |
|
212 |
|
(6,431 |
) |
(4,734 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income tax |
|
|
|
|
|
|
|
|
|
Current |
1,245 |
|
33 |
|
2,914 |
|
2,139 |
|
|
Deferred |
1,410 |
|
(1,661 |
) |
(2,857 |
) |
(4,776 |
) |
|
Income tax expense (recovery) |
2,655 |
|
(1,628 |
) |
57 |
|
(2,637 |
) |
|
Net income (loss) for the period |
(1,942 |
) |
1,840 |
|
(6,488 |
) |
(2,097 |
) |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income (loss) per share |
(0.02 |
) |
0.02 |
|
(0.06 |
) |
(0.02 |
) |
|
Weighted average number of common shares
outstanding |
|
|
|
|
|
|
|
|
|
Basic |
101,330,154 |
|
108,475,559 |
|
101,251,374 |
|
109,988,526 |
|
|
Diluted |
101,330,154 |
|
108,678,732 |
|
101,251,374 |
|
109,988,526 |
|
|
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS[In thousands of
Canadian dollars][Unaudited] |
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
OPERATING ACTIVITIES |
|
|
|
|
|
Net (loss) income for the period |
(1,942 |
) |
1,840 |
|
(6,488 |
) |
(2,097 |
) |
|
Adjustments reconciling net income to operating cash flows: |
|
|
|
|
|
Depreciation and amortization |
13,169 |
|
12,158 |
|
25,750 |
|
25,241 |
|
|
Net loss (gain) on financial instruments |
665 |
|
(3,939 |
) |
16,932 |
|
7,908 |
|
|
Unrealized foreign exchange (gain) loss |
(4,124 |
) |
(809 |
) |
(6,329 |
) |
(2,062 |
) |
|
Other operating activities |
3,078 |
|
407 |
|
(3,646 |
) |
(92 |
) |
|
|
10,846 |
|
9,657 |
|
26,219 |
|
28,898 |
|
|
Changes in non-cash working capital and other items |
(11,932 |
) |
(11,143 |
) |
3,576 |
|
(26,068 |
) |
|
Cash inflow (outflow) from operating activities |
(1,086 |
) |
(1,486 |
) |
29,795 |
|
2,830 |
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
Purchase of marketable securities |
(41,625 |
) |
(76,334 |
) |
(77,922 |
) |
(185,550 |
) |
|
Proceeds on maturity of marketable securities |
69,674 |
|
75,200 |
|
91,990 |
|
181,168 |
|
|
Investment in funds |
(1,072 |
) |
(148 |
) |
(1,203 |
) |
(170 |
) |
|
Purchase of intangible assets |
(16,735 |
) |
— |
|
(26,817 |
) |
(7,667 |
) |
|
Other investing activities |
1,511 |
|
5,482 |
|
1,339 |
|
7,705 |
|
|
Cash inflow (outflow) from investing activities |
11,753 |
|
4,200 |
|
(12,613 |
) |
(4,514 |
) |
|
FINANCING ACTIVITIES |
|
|
|
|
|
Repurchase of common shares through Normal Course Issuer Bid |
(1,242 |
) |
(13,951 |
) |
(1,242 |
) |
(24,465 |
) |
|
Principal repayment of bank loans |
(6,930 |
) |
(5,422 |
) |
(8,659 |
) |
(6,009 |
) |
|
Proceeds from bank loans |
747 |
|
1,443 |
|
1,292 |
|
2,090 |
|
|
Other financing activities |
(3,937 |
) |
(4,165 |
) |
(5,650 |
) |
(5,583 |
) |
|
Cash outflow from financing activities |
(11,362 |
) |
(22,095 |
) |
(14,259 |
) |
(33,967 |
) |
|
Increase (decrease) in cash and cash equivalents during the
period |
(695 |
) |
(19,381 |
) |
2,923 |
|
(35,651 |
) |
|
Cash and cash equivalents, beginning of the period |
62,835 |
|
56,218 |
|
58,761 |
|
71,679 |
|
|
Net foreign exchange difference |
(1,333 |
) |
1,007 |
|
(877 |
) |
1,816 |
|
|
Cash and cash equivalents, end of the period |
60,807 |
|
37,844 |
|
60,807 |
|
37,844 |
|
|
Cash and cash equivalents |
60,807 |
|
37,844 |
|
60,807 |
|
37,844 |
|
|
Marketable securities |
91,861 |
|
103,779 |
|
91,861 |
|
103,779 |
|
|
Total cash, cash equivalents and marketable securities |
152,668 |
|
141,623 |
|
152,668 |
|
141,623 |
|
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