Knight Therapeutics Inc. (TSX: GUD) ("Knight" or “the Company”), a
leading pan-American (ex-US) specialty pharmaceutical company,
today reported financial results for its first quarter ended
March 31, 2024. All currency amounts are in thousands except
for share and per share amounts. All currencies are Canadian unless
otherwise specified.
2024 Highlights
Financial results
- Revenues were $86,604, an increase of $4,007 or 5% over the
same period in prior year driven by the growth of our key promoted
products offset by our mature branded generic products.
- Gross margin was $41,699 or 48% compared to $40,762 or 49% in
the same period in prior year.
- Adjusted EBITDA1 was $13,589, a decrease of $4,648 or 25% over
the same period in prior year reflecting higher marketing spend for
the launches of Imvexxy®, Bijuva® and Minjuvi® as well as
development costs on our pipeline products.
- Adjusted EBITDA per share1 was $0.13, a decrease of $0.04 or
24% over the same period in prior year.
- Net loss on financial assets measured at fair value through
profit or loss was $16,267 driven mainly by unrealized losses on
the valuation of certain private investments in our strategic
funds.
- Net loss was $4,546, compared to $3,937 in the same period in
prior year.
- Cash inflow from operations was $30,881, an increase of $26,565
or 616% over the same period in prior year driven by operating
results and a decrease in working capital.
Corporate developments
- Promoted Henrique Dias and Melanie Groleau to Global VP
Marketing and Global VP Medical and Clinical, respectively.
Products
- In-licensed IPX203 (carbidopa and levodopa extended-release
capsules) for Canada and Latin America.
- Submitted fostamatinib for ANVISA approval in Brazil.
- Obtained regulatory approval for Karfib® (carfilzomib) in
Colombia.
- Launched Minjuvi® (tafasitamab) in Brazil.
- Launched Imvexxy® (estradiol vaginal inserts) and Bijuva®
(estradiol and progesterone) in Canada.
Subsequent to quarter-end
- Entered into exclusive supply and distribution agreement for
JORNAY PM® (methylphenidate HCI extended-release capsules) for
Canada and Latin America.
- 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.
“I am pleased to report that for the three months ended March
31, 2024, revenues were over $86 million, a growth of 5% over the
same period prior year. In addition, we are investing for the
future growth of our portfolio with the launch of three products
and the in-licensing of two products for Canada and Latin America.
We launched Bijuva® and Imvexxy® in Canada and Minjuvi® in Brazil.
Furthermore, we have strengthened our neurology portfolio with the
addition of QelbreeTM, IPX203 and JORNAY PM® and will be leveraging
our infrastructure behind Exelon®,” said Samira Sakhia, President
and Chief Executive Officer of Knight Therapeutics Inc.
|
SELECTED FINANCIAL RESULTS REPORTED UNDER IFRS[In
thousands of Canadian dollars] |
| |
|
|
Change |
|
|
Q1-24 |
Q1-23 |
$1 |
|
%2 |
| |
|
|
|
|
|
Revenues |
86,604 |
|
82,597 |
|
|
4,007 |
|
5 |
% |
| Gross margin |
41,699 |
|
40,762 |
|
|
937 |
|
2 |
% |
| Gross margin % |
48 |
% |
49 |
% |
|
|
| Selling and marketing |
12,649 |
|
10,665 |
|
|
(1,984 |
) |
19 |
% |
| General and
administrative |
10,538 |
|
9,106 |
|
|
(1,432 |
) |
16 |
% |
| Research and development |
4,980 |
|
4,187 |
|
|
(793 |
) |
19 |
% |
|
Amortization of intangible assets |
10,872 |
|
11,171 |
|
|
299 |
|
3 |
% |
|
Operating expenses |
39,039 |
|
35,129 |
|
|
(3,910 |
) |
11 |
% |
| |
|
|
|
|
| Net
loss |
(4,546 |
) |
(3,937 |
) |
|
(609 |
) |
15 |
% |
|
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] |
| |
Q1-24 |
Q1-23 |
Change |
|
|
|
|
|
$2 |
|
%3 |
|
| |
| |
|
|
|
|
|
|
Revenues |
85,795 |
|
82,667 |
|
|
3,128 |
|
4 |
% |
|
| Gross margin |
40,695 |
|
41,386 |
|
|
(691 |
) |
2 |
% |
|
| Gross margin (%) |
47 |
% |
50 |
% |
|
|
|
| |
|
|
|
|
|
|
|
| Selling and marketing |
12,493 |
|
10,713 |
|
|
(1,780 |
) |
17 |
% |
|
| General and
administrative |
10,212 |
|
8,887 |
|
|
(1,325 |
) |
15 |
% |
|
| Research and development |
4,840 |
|
4,102 |
|
|
(738 |
) |
18 |
% |
|
| Amortization of intangible
assets |
10,846 |
|
11,125 |
|
|
279 |
|
3 |
% |
|
|
Operating expenses |
38,391 |
|
34,827 |
|
|
(3,564 |
) |
10 |
% |
|
| |
|
|
|
|
|
| EBITDA1 |
13,589 |
|
18,237 |
|
|
(4,648 |
) |
25 |
% |
|
| Adjusted EBITDA1 |
13,589 |
|
18,237 |
|
|
(4,648 |
) |
25 |
% |
|
|
Adjusted EBITDA per share1 |
0.13 |
|
0.17 |
|
|
(0.04 |
) |
24 |
% |
|
|
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. |
| 2 |
A positive variance represents a
positive impact to net income (loss) and a negative variance
represents a negative impact to net income (loss). |
| 3 |
Percentage change is presented in
absolute values. |
RevenuesFor the quarter ended March 31, 2024,
revenues were $85,795, an increase of $3,128 or 4% mainly driven by
a growth of $7,163 or 13% from our promoted innovative products
offset by the decline on our mature branded generic portfolio. The
table below provides revenues by therapeutic area.
| |
Excluding impact of IAS 293 |
| |
|
|
Change |
|
Therapeutic Area |
Q1-24 |
Q1-23 |
$1 |
|
%2 |
|
Oncology/Hematology |
30,843 |
29,093 |
|
1,750 |
|
6 |
% |
| Infectious Diseases |
38,062 |
30,896 |
|
7,166 |
|
23 |
% |
| Other
Specialty |
16,890 |
22,678 |
|
(5,788 |
) |
26 |
% |
|
Total |
85,795 |
82,667 |
|
3,128 |
|
4 |
% |
|
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. |
| 3 |
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 excluding the impact of
hyperinflation is explained by the following:
- Oncology/Hematology: The oncology/hematology
portfolio grew by approximately $4,600 primarily due to the growth
of key promoted products including Lenvima®, Trelstar®, Akynzeo®
and Palbocil® as well due to the launch of Minjuvi® in Brazil. The
increase is offset by a reduction of approximately $2,850 in
revenues of our mature and branded generics products due to their
lifecycle including the entrance of new competitors.
- Infectious Diseases: The infectious disease
portfolio grew by $7,166 driven by the growth of our key promoted
products including AmBisome® and Cresemba® partly offset by the
timing of demand for certain products including Impavido®. The
increase included $6,800 of incremental revenues related to the
contract with MOH for AmBisome®.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 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 in Q1-24. In December 2023, Knight signed a
new contract with the MOH ("2024 MOH Contract") and it is expected
that $16,500 will be delivered in 2024 of which $6,800 was
delivered in Q1-24. The total MOH sales for AmBisome® delivered in
Q1-24 was $9,200.
- Other Specialty: The Other Specialty portfolio
decreased by approximately $5,788 mainly due to advance purchases
of Exelon® in Q1-23, due to the commercial transition from Novartis
to Knight in certain countries as well as the purchasing patterns
for certain products.
Gross marginFor the quarter
ended March 31, 2024, gross margin, as a percentage of
revenues, was 48% compared to 49% in Q1-23. Excluding IAS 29, gross
margin, as a percentage of revenues, was 47% in Q1-24 and 50% in
Q1-23. The decrease in gross margin, as a percentage of revenues
was due to product mix.
Selling and marketing (“S&M”)
expenses: For the quarter ended March 31, 2024,
S&M expenses were $12,649, an increase of $1,984 or 19%,
compared to the same period in prior year. Excluding the impact of
IAS 29, the increase was $1,780 or 17%. The increase was mainly due
to the marketing spend for the launches of Imvexxy® and Bijuva® in
Canada as well as Minjuvi® in Brazil.
General and administrative (“G&A”)
expenses: For the quarter ended March 31, 2024,
G&A expenses were $10,538 an increase of $1,432 or 16%,
compared to the same period in prior year. Excluding the impact of
IAS 29, G&A expenses increased by $1,325 or 15% driven by
increase in structure and compensation expenses.
Research and development (“R&D”)
expenses: For the quarter ended March 31, 2024,
R&D expenses were $4,980, an increase of $793 or 19%, compared
to the same period in prior year. Excluding the impact of IAS 29,
the increase was $738 or 18%. 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 $587 in Q1-24, an increase of $575 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 EBITDA1For the
three-month period ended March 31, 2024, adjusted EBITDA was
$13,589, a decrease of $4,648 or 25%. The decrease in adjusted
EBITDA was driven by an increase in operating expenses due to
investments on new product launches and pipeline.
Net lossFor the quarter ended
March 31, 2024, the net loss was $4,546 compared to a net loss
of $3,937 for the same period in prior year. The variance mainly
resulted from the above-mentioned items and a net loss on the
revaluation of financial assets measured at fair value through
profit or loss of $16,267 versus a net loss of $11,847 in the same
period in prior year mainly driven by unrealized losses in the fair
value of financial assets, partly offset by (1) the foreign
exchange gain of $1,934 in Q1-24 compared to a foreign exchange
gain of $73 in Q1-23, and (2) income tax recovery of $2,598 in
Q1-24 and $1,009 in Q1-23 mainly driven by the recognition of
certain deferred tax assets due to tax losses generated in certain
jurisdictions and timing differences related to our financial
assets.
|
SELECTED BALANCE SHEET ITEMS[In thousands of
Canadian dollars] |
| |
|
|
Change |
|
|
March 31, 2024 |
December 31, 2023 |
$ |
%1 |
| |
|
|
|
|
|
Cash, cash equivalents and marketable securities |
181,859 |
161,825 |
20,034 |
|
12 |
% |
| Trade and other
receivables |
136,580 |
141,684 |
(5,104 |
) |
4 |
% |
| Inventories |
95,400 |
91,834 |
3,566 |
|
4 |
% |
| Financial assets |
116,214 |
128,369 |
(12,155 |
) |
9 |
% |
| Accounts payable and accrued
liabilities |
94,711 |
90,617 |
4,094 |
|
5 |
% |
| Bank
loans |
62,241 |
61,866 |
375 |
|
1 |
% |
|
1 |
Percentage change is presented in absolute values. |
Trade and other receivables: As
at March 31, 2024, trade and other receivables were at
$136,580, a decrease of $5,104 or 4% compared to December 31, 2023,
mainly due to the timing of the collection of payments from
customers.
Inventories: As at
March 31, 2024, inventories were at $95,400, an increase of
$3,566 or 4%. Excluding the impact of IAS 29, inventories decreased
by $4,192 or 5% driven by the timing of sales and purchases of
inventory.
Financial assets: As at
March 31, 2024, financial assets were at $116,214, a decrease
of $12,155 or 9%, compared to December 31, 2023 mainly driven by
unrealized losses on the valuation of certain private investments
of our strategic funds.
Accounts payable and accrued
liabilities: As at March 31, 2024, accounts payable
and accrued liabilities were $94,711, an increase of $4,094 or 5%.
In addition, as at December 31, 2023, the accounts payable and
accrued liabilities included $5,283 of payables related to sales
milestones on certain products and the acquisition of property,
plant and equipments ("Capital Expenditure Payables"). Excluding
the Capital Expenditure Payables, the accounts payable and accrued
liabilities increased by $9,377 or 10% compared to December 31,
2023 driven by the purchase of inventory for our key promoted
products which is expected to be settled in Q2-24.
Cash, cash equivalents and marketable
securities: As at March 31, 2024, Knight had $181,859
in cash, cash equivalents and marketable securities, an increase of
$20,034 or 12% compared to December 31, 2023. The increase is
mainly due to cash inflows from operations partially offset by the
settlement of upfront and milestone payments in connection with
product licensing agreements including QelbreeTM, IPX203, and
Cresemba®. The cash inflows from operating activities were $30,881,
driven by the operating results adjusted for noncash items such as
depreciation, amortization as well as decrease in working capital
of $15,508. The decease in working capital was mainly due to the
increase in accounts payable and a decrease in inventory excluding
the impact of IAS 29.
|
1 |
Adjusted gross margin and adjusted EBITDA is non-GAAP measures.
Refer to section “Non-GAAP measures” for additional details. |
Product Updates
Regulatory submissions, approvals and
product launches
FostamatinibDuring the quarter, Knight submitted
a marketing authorization for regulatory approval in Brazil for
fostamatinib for the treatment of thrombocytopenia in adult
patients with chronic immune thrombocytopenia (ITP) who have had an
insufficient response to a previous treatment.
Karfib® (carfilzomib)During the quarter, Knight obtained the
regulatory approval for Karfib® in Colombia for the treatment of
patients with relapsed or refractory multiple myeloma who have
received one or more previous lines of therapy. Karfib® is expected
to be launched in H2 2024.
Imvexxy® (estradiol vaginal inserts) and Bijuva® (estradiol and
progesterone)During the quarter, Knight launched Bijuva® and
Imvexxy® in Canada. Bijuva® is indicated for the treatment of
moderate-to-severe vasomotor symptoms due to menopause. Imvexxy® is
indicated for the treatment of moderate-to-severe dyspareunia
(vaginal pain associated with sexual activity), a symptom of vulvar
and vaginal atrophy (VVA), due to menopause. Imvexxy® is competing
in the VVA market which was over 90 million dollars in 2023 and
grew at a CAGR of 9% since 2020, according to IQVIA.
Minjuvi® (tafasitamab)During the quarter, Knight
launched Minjuvi® in Brazil. Minjuvi® in combination with
lenalidomide followed by tafasitamab monotherapy is indicated for
the treatment of adult patients with relapsed or refractory diffuse
large B-cell lymphoma (DLBCL), including DLBCL due to low-grade
lymphoma, who are not eligible for autologous stem cell
transplantation (ASCT). Knight expects to file for private
reimbursement in Brazil in Q2-24 and is expecting to file for
private reimbursement in Q2-24.
Expansion of Pipeline
IPX203During the quarter, Knight in-licensed IPX203 for Canada
and Latin America. IPX203 is a novel, oral formulation of
carbidopa/levodopa ("CD/LD") extended-release capsules designed for
the treatment of Parkinson’s disease. IPX203 contains
immediate-release (IR) granules and extended-release (ER) coated
beads. The IR granules consist of CD and LD, with a disintegrant
polymer to allow for rapid dissolution. The ER beads consist of LD,
coated with a sustained release polymer to allow for slow release
of the drug, a mucoadhesive polymer to keep the granules adhered to
the area of absorption longer, and an enteric coating to prevent
the granules from disintegrating prematurely in the stomach. IPX203
was studied in the RISE-PD clinical study which was a 20-week,
randomized, double-blind, double-dummy, active-controlled, phase 3
clinical trial with 630 patients. The RISE-PD study met its primary
and secondary endpoints and showed that treatment with IPX203
demonstrated statistically significant improvement in daily “Good
On” time with fewer doses of IPX203 compared with immediate-release
carbidopa-levodopa (least squares mean, 0.53 hours; 95% CI,
0.09-0.97). In that study, IPX203 was dosed an average of three
times per day versus 5 times per day for immediate-release
carbidopa-levodopa1. IPX203 is expected to compete in a market
valued at over $50,000 in Canada and over $120,000 in Brazil,
according to IQVIA.
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.
Knight reconfirmed its guidance targets for
fiscal 2024. Knight expects to generate between $335 million to
$350 million in revenues and adjusted EBITDA1 to be
approximately 17% of revenues. The guidance is based on a number of
assumptions, including but not limited to the following:
- no revenues for business development transactions not completed
as at May 8, 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
- foreign currency exchange rates with the exception of Argentina
remaining similar to 2023
- 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 first quarter ended March 31, 2024, today at 8:30 am ET.
Knight cordially invites all interested parties to participate in
this call.
Date: Thursday, May 9,
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 |
References:
1. Hauser RA
et al. JAMA Neurol. 2023 Oct 1;80(10):1062-1069.
IMPACT OF HYPERINFLATION[In
thousands of Canadian dollars]
HyperinflationThe 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.
Financial results excluding the impact
of hyperinflationIf the Company did not apply IAS 29, the
effect on the Company's operating income would be as follows:
|
|
Q1-24 |
| |
Reported under IFRS |
Impact ofIAS 291 |
Adjusted1 |
|
|
| |
|
|
|
|
Revenues |
86,604 |
|
(809 |
) |
85,795 |
|
| Cost of
goods sold |
44,905 |
|
195 |
|
45,100 |
|
|
Gross margin |
41,699 |
|
(1,004 |
) |
40,695 |
|
| Gross margin (%) |
48 |
% |
|
47 |
% |
| |
|
|
|
| Expenses |
|
|
|
| Selling and marketing |
12,649 |
|
(156 |
) |
12,493 |
|
| General and
administrative |
10,538 |
|
(326 |
) |
10,212 |
|
| Research and development |
4,980 |
|
(140 |
) |
4,840 |
|
| Amortization of intangible
assets |
10,872 |
|
(26 |
) |
10,846 |
|
|
Operating income |
2,660 |
|
(356 |
) |
2,304 |
|
|
1 |
Financial results excluding the impact of hyperinflation is a
non-GAAP measure. Refer to section “Non-GAAP measures” for
additional details. |
|
|
Q1-23 |
| |
Reported under IFRS |
Impact of IAS 291 |
Adjusted1 |
|
|
| |
|
|
|
|
Revenues |
82,597 |
|
70 |
|
82,667 |
|
| Cost of
goods sold |
41,835 |
|
(554 |
) |
41,281 |
|
|
Gross margin |
40,762 |
|
624 |
|
41,386 |
|
| Gross margin (%) |
49 |
% |
|
50 |
% |
| |
|
|
|
| Expenses |
|
|
|
| Selling and marketing |
10,665 |
|
48 |
|
10,713 |
|
| General and
administrative |
9,106 |
|
(219 |
) |
8,887 |
|
| Research and development |
4,187 |
|
(85 |
) |
4,102 |
|
| Amortization of intangible
assets |
11,171 |
|
(46 |
) |
11,125 |
|
|
Operating income |
5,633 |
|
926 |
|
6,559 |
|
|
1 |
Financial results excluding the impact of hyperinflation is a
non-GAAP measure. Refer to section “Non-GAAP measures” for
additional details. |
|
SELECTED FINANCIAL RESULTS AT CONSTANT
CURRENCY |
|
|
Q1-24 |
Q1-23 |
Variance |
|
Excluding impact of IAS 291 |
|
|
Constant Currency1 |
$2 |
|
%3 |
| |
|
|
|
|
|
Revenues |
85,795 |
|
86,147 |
|
|
(352 |
) |
— |
% |
| Gross margin |
40,695 |
|
43,189 |
|
|
(1,073 |
) |
2 |
% |
| Gross
margin % |
47 |
% |
50 |
% |
|
|
|
Operating expenses4 |
38,391 |
|
35,256 |
|
|
(3,135 |
) |
9 |
% |
| EBITDA1 |
13,589 |
|
19,688 |
|
|
(6,099 |
) |
31 |
% |
| Adjusted EBITDA1 |
13,589 |
|
19,688 |
|
|
(6,099 |
) |
31 |
% |
|
Adjusted EBITDA per share1 |
0.13 |
|
0.18 |
|
|
(0.05 |
) |
28 |
% |
|
1 |
Financial results at constant currency, excluding the impact of
hyperinflation, EBITDA, adjusted EBITDA and adjusted EBITDA per
share are non-GAAP measures. Refer to section “Non-GAAP measures”
for additional details. |
| 2 |
A positive variance represents a
positive impact to net income (loss) and a negative variance
represents a negative impact to net income (loss). |
| 3 |
Percentage change is presented in
absolute values. |
| 4 |
Operating expenses include
selling and marketing expenses, general and administrative
expenses, research and development expenses, and amortization of
intangible assets. |
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: 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 loss is converted using the closing
foreign exchange rate of the month.
Revenues and Financial results at
constant currency: Revenues 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 the 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.
Adjusted Gross Margin: Adjusted
gross margin excludes the impact of IAS 29.
EBITDA: Operating income or
loss adjusted to exclude amortization and impairment of non-current
assets, depreciation, purchase price allocation accounting
adjustments, the impact of IAS 29 (accounting under hyperinflation)
but to include costs related to leases.
Adjusted EBITDA: EBITDA
adjusted for acquisition costs and non-recurring expenses.
Adjusted EBITDA per share:
Adjusted EBITDA over number of common shares outstanding at the end
of the respective period.
Reconciliation to EBITDA, adjusted
EBITDA and adjusted EBITDA per share
For the three-month period March 31, 2024, the Company
calculated EBITDA and adjusted EBITDA as follows:
| |
|
|
Change |
|
|
Q1-24 |
Q1-23 |
$1 |
|
%2 |
|
Operating income |
2,660 |
|
5,633 |
|
|
(2,973 |
) |
53 |
% |
| Adjustments to
operating income: |
|
|
|
|
|
Amortization of intangible assets |
10,872 |
|
11,171 |
|
|
(299 |
) |
3 |
% |
|
Depreciation of property, plant and equipment and ROU assets |
1,709 |
|
1,912 |
|
|
(203 |
) |
11 |
% |
|
Lease costs (IFRS 16 adjustment) |
(882 |
) |
(731 |
) |
|
(151 |
) |
21 |
% |
|
Impact of IAS 29 |
(770 |
) |
252 |
|
|
(1,022 |
) |
406 |
% |
|
EBITDA |
13,589 |
|
18,237 |
|
|
(4,648 |
) |
25 |
% |
|
Adjusted EBITDA |
13,589 |
|
18,237 |
|
|
(4,648 |
) |
25 |
% |
|
Adjusted EBITDA per share |
0.13 |
|
0.17 |
|
|
(0.04 |
) |
24 |
% |
|
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. |
The Company calculated adjusted EBITDA per share as follows:
|
|
Q1-24 |
Q1-23 |
| Adjusted
EBITDA |
13,589 |
18,237 |
| Adjusted EBITDA per share |
0.13 |
0.17 |
| Number
of common shares outstanding at period end (in thousands) |
101,187 |
110,082 |
|
INTERIM CONSOLIDATED BALANCE SHEETS[In thousands
of Canadian dollars] |
|
As at |
March 31, 2024 |
December 31, 2023 |
| ASSETS |
|
|
| Current |
|
|
| Cash and cash equivalents |
62,835 |
58,761 |
| Marketable securities |
111,436 |
95,657 |
| Trade receivables |
85,963 |
88,722 |
| Other receivables |
6,127 |
7,427 |
| Inventories |
95,400 |
91,834 |
| Prepaids and deposits |
5,251 |
4,881 |
| Other current financial
assets |
17,983 |
15,753 |
| Income
taxes receivable |
3,450 |
2,080 |
|
Total current assets |
388,445 |
365,115 |
|
|
|
|
| Marketable securities |
7,588 |
7,407 |
| Prepaids and deposits |
7,811 |
7,767 |
| Right-of-use assets |
7,100 |
6,190 |
| Property, plant and
equipment |
14,447 |
11,669 |
| Intangible assets |
290,734 |
289,960 |
| Goodwill |
85,505 |
79,844 |
| Other financial assets |
98,231 |
112,616 |
| Deferred tax assets |
23,854 |
19,390 |
| Other
long-term receivables |
44,490 |
45,535 |
| |
579,760 |
580,378 |
|
Total assets |
968,205 |
945,493 |
|
INTERIM CONSOLIDATED BALANCE SHEETS (continued)[In
thousands of Canadian dollars] |
|
As at |
March 31, 2024 |
December 31, 2023 |
|
|
|
|
| LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
| Current |
|
|
| Accounts payable and accrued
liabilities |
86,034 |
85,366 |
| Lease liabilities |
2,782 |
1,728 |
| Other liabilities |
1,646 |
1,046 |
| Bank loans |
19,316 |
17,850 |
| Income taxes payable |
1,586 |
1,182 |
| Other
balances payable |
5,121 |
6,857 |
|
Total current liabilities |
116,485 |
114,029 |
| |
|
|
| Accounts payable and accrued
liabilities |
8,677 |
5,251 |
| Lease liabilities |
5,071 |
5,497 |
| Bank loans |
42,925 |
44,016 |
| Other balances payable |
28,645 |
27,012 |
|
Deferred tax liabilities |
4,513 |
2,817 |
|
Total liabilities |
206,316 |
198,622 |
| |
|
|
| Shareholders’
equity |
|
|
| Share capital |
540,134 |
540,046 |
| Warrants |
117 |
117 |
| Contributed surplus |
26,501 |
25,991 |
| Accumulated other
comprehensive income |
48,795 |
29,829 |
|
Retained earnings |
146,342 |
150,888 |
|
Total shareholders’ equity |
761,889 |
746,871 |
|
Total liabilities and shareholders’ equity |
968,205 |
945,493 |
|
INTERIM CONSOLIDATED STATEMENTS OF LOSS[In
thousands of Canadian dollars, except for share and per share
amounts] |
|
|
Three months ended March 31, |
|
|
|
2024 |
|
2023 |
|
| |
|
|
| Revenues |
86,604 |
|
82,597 |
|
| Cost of
goods sold |
44,905 |
|
41,835 |
|
|
Gross margin |
41,699 |
|
40,762 |
|
|
Gross margin % |
48 |
% |
49 |
% |
| |
|
|
| Expenses |
|
|
| Selling and marketing |
12,649 |
|
10,665 |
|
| General and
administrative |
10,538 |
|
9,106 |
|
| Research and development |
4,980 |
|
4,187 |
|
| Amortization of intangible
assets |
10,872 |
|
11,171 |
|
|
Operating income |
2,660 |
|
5,633 |
|
| |
|
|
| Interest income on financial
instruments measured at amortized cost |
(2,136 |
) |
(2,179 |
) |
| Other interest income |
(505 |
) |
(1,173 |
) |
| Interest expense |
2,577 |
|
2,791 |
|
| Other (income) expense |
(169 |
) |
94 |
|
| Net loss on financial assets
measured at fair value through profit or loss |
16,267 |
|
11,847 |
|
| Foreign exchange gain |
(1,934 |
) |
(73 |
) |
| Gain on
hyperinflation |
(4,296 |
) |
(728 |
) |
|
Loss before income taxes |
(7,144 |
) |
(4,946 |
) |
| |
|
|
| Income
taxes |
|
|
| Current |
1,669 |
|
2,106 |
|
|
Deferred |
(4,267 |
) |
(3,115 |
) |
|
Income tax recovery |
(2,598 |
) |
(1,009 |
) |
|
Net loss |
(4,546 |
) |
(3,937 |
) |
| |
|
|
| |
|
|
| Basic and diluted net loss per
share |
(0.04 |
) |
(0.04 |
) |
| Basic and diluted
weighted average number of common shares outstanding |
101,173,461 |
|
111,518,305 |
|
|
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS[In
thousands of Canadian dollars] |
|
|
Three months ended March 31, |
|
|
2024 |
|
2023 |
|
| OPERATING
ACTIVITIES |
|
|
| Net income (loss) for the
period |
(4,546 |
) |
(3,937 |
) |
| Adjustments reconciling net
income to operating cash flows: |
|
|
| Depreciation and
amortization |
12,581 |
|
13,083 |
|
| Net loss (gain) on financial
instruments |
16,267 |
|
11,847 |
|
| Unrealized foreign exchange
(gain) loss |
(2,205 |
) |
(1,253 |
) |
| Other
operating activities |
(6,724 |
) |
(499 |
) |
| |
15,373 |
|
19,241 |
|
| Changes
in non-cash working capital and other items |
15,508 |
|
(14,925 |
) |
| Cash
inflow from operating activities |
30,881 |
|
4,316 |
|
| |
|
|
| INVESTING
ACTIVITIES |
|
|
| Purchase of marketable
securities |
(36,297 |
) |
(109,216 |
) |
| Proceeds on maturity of
marketable securities |
22,316 |
|
105,968 |
|
| Investment in funds |
(131 |
) |
(22 |
) |
| Purchase of intangible
assets |
(10,082 |
) |
(7,667 |
) |
| Other
investing activities |
(172 |
) |
2,223 |
|
| Cash
inflow (outflow) from investing activities |
(24,366 |
) |
(8,714 |
) |
| |
|
|
| FINANCING
ACTIVITIES |
|
|
| Repurchase of common shares
through Normal Course Issuer Bid |
— |
|
(10,514 |
) |
| Principal repayment of bank
loans |
(1,729 |
) |
(587 |
) |
| Proceeds from bank loans |
545 |
|
647 |
|
| Other
financing activities |
(1,713 |
) |
(1,418 |
) |
| Cash
outflow from financing activities |
(2,897 |
) |
(11,872 |
) |
| |
|
|
| Increase (decrease) in cash
and cash equivalents during the period |
3,618 |
|
(16,270 |
) |
| Cash and cash equivalents,
beginning of the period |
58,761 |
|
71,679 |
|
| Net
foreign exchange difference |
456 |
|
809 |
|
| Cash
and cash equivalents, end of the period |
62,835 |
|
56,218 |
|
| |
|
|
| Cash and cash equivalents |
62,835 |
|
56,218 |
|
|
Marketable securities |
119,024 |
|
104,251 |
|
|
Total cash, cash equivalents and marketable
securities |
181,859 |
|
160,469 |
|
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