Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,514.37 65.12 0.40%
S&P 500 1,879.55 7.66 0.41%
NASDAQ 4,161.46 39.91 0.97%
Ticker Volume Price Price Delta
STOXX 50 3,193.00 -6.69 -0.21%
FTSE 100 6,680.13 -1.63 -0.02%
DAX 9,592.19 -7.90 -0.08%
Ticker Volume Price Price Delta
NIKKEI 14,546.27 157.50 1.09%
TOPIX 1,173.81 11.31 0.97%
HANG SENG 22,509.64 -221.04 -0.97%

Patheon reports fiscal 2013 results


Top-line growth at 36.6 percent

TORONTO, Jan. 10, 2014 /CNW/ - Patheon Inc. (TSX: PTI), a leading provider of contract development and commercial manufacturing services to the global pharmaceutical industry, announced today full year results for fiscal 2013.

Highlights for the year include:


    --  Revenues for the year increased to $1,023.1 million from $749.1
        million in the same period last year, an increase of $274.0
        million or 36.6 percent. Revenue resulting from the Banner
        acquisition was $217.3 million.
    --  Gross profit for the year increased to $249.1 million from
        $159.3 million in the same period last year, an increase of
        $89.8 million or 56.4 percent.
    --  Adjusted EBITDA increased in the current fiscal year to $146.2
        million from $87.4 million in the same period last year, an
        increase of $58.8 million.
    --  Loss from continuing operations improved to $35.7 million from
        a loss of $106.4 million in the prior year, an improvement of
        $70.7 million.

In addition, as previously announced, Patheon has entered into an arrangement 
agreement with JLL/Delta Patheon Holdings, L.P., a limited partnership under 
which Patheon will be taken private pursuant to a court-approved plan of 
arrangement under the Canada Business Corporations Act. The new company has 
not been named and is being called NewCo. NewCo will be a leading global 
contract development and manufacturing organization with anticipated fiscal 
2014 sales of about $2.0 billion (pro-forma) and a strong EBITDA and 
operational cash flow. NewCo is sponsored by an entity controlled by JLL 
Partners, Inc. and Koninklijke DSM N.V.

About Patheon

Patheon Inc. (TSX: PTI) is a leading provider of contract development and 
commercial manufacturing services to the global pharmaceutical industry for a 
full array of solid and sterile dosage forms. Through the company's recent 
acquisition of Banner Pharmacaps - a market leader in soft gelatin capsule 
technology - Patheon now also includes a proprietary products and technology 
business.

Patheon provides the highest quality products and services to approximately 
300 of the world's leading pharmaceutical and biotechnology companies. The 
company's integrated network consists of 15 locations, including 12 commercial 
contract manufacturing facilities and 9 development centers across North 
America and Europe. Patheon enables customer products to be launched with 
confidence anywhere in the world. For more information, visit www.patheon.com.

Use of Non-GAAP Financial Measures

Commencing in fiscal 2013, the Company revised its calculation of Adjusted 
EBITDA to exclude stock-based compensation expense, consulting costs related 
to its operational initiatives, purchase accounting adjustments, and 
acquisition-related litigation expenses. The Company believes that excluding 
these items from Adjusted EBITDA better reflects the underlying performance. 
Based on the revisions to the definition of Adjusted EBITDA, the Company has 
recast the presentation of Adjusted EBITDA for the twelve months ended October 
31, 2012, to be consistent with the current period presentation. Adjusted 
EBITDA is now income (loss) from continuing operations before repositioning 
expenses, interest expense, foreign exchange losses reclassified from other 
comprehensive income (loss), refinancing expenses, acquisition and integration 
costs (including certain product returns and inventory write-offs recorded in 
gross profit), gains and losses on sale of capital assets, income taxes, asset 
impairment charges, depreciation and amortization, stock-based compensation 
expense, consulting costs related to our operational initiatives, purchase 
accounting adjustments, acquisition-related litigation expenses and other 
income and expenses. Since Adjusted EBITDA is a non-GAAP measure that does not 
have a standardized meaning, it may not be comparable to similar measures 
presented by other issuers. Readers are cautioned that Adjusted EBITDA should 
not be construed as an alternative to net income (loss) determined in 
accordance with U.S. GAAP as an indicator of performance. Adjusted EBITDA is 
used by management as an internal measure of profitability. The Company has 
included Adjusted EBITDA because it believes that this measure is used by 
certain investors to assess the Company's financial performance before 
non-cash charges and certain costs that the Company does not believe are 
reflective of its underlying business. A reconciliation of Adjusted EBITDA to 
the closest U.S. GAAP measure is included with the financial statements in 
this press release.

Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements which reflect our 
expectations regarding our future growth, results of operations, performance 
(both operational and financial) and business prospects and opportunities. All 
statements, other than statements of historical fact, are forward-looking 
statements. Wherever possible, words such as "plans," "expects," or "does not 
expect," "forecasts," "anticipates" or "does not anticipate," "believes," 
"intends" and similar expressions or statements that certain actions, events 
or results "may," "could," "should," "would," "might" or "will" be taken, 
occur or be achieved have been used to identify these forward-looking 
statements. Although the forward-looking statements contained in this press 
release reflect our current assumptions based upon information currently 
available to us and based upon what we believe to be reasonable assumptions, 
we cannot be certain that actual results will be consistent with these 
forward-looking statements. Our current material assumptions include 
assumptions related to customer volumes, regulatory compliance, foreign 
exchange rates, employee severance costs associated with termination and 
projected integration savings related to the Banner acquisition. 
Forward-looking statements necessarily involve significant known and unknown 
risks, assumptions and uncertainties that may cause our actual results, 
performance, prospects and opportunities in future periods to differ 
materially from those expressed or implied by such forward-looking statements. 
These risks and uncertainties include, among other things, risks related to 
international operations and foreign currency fluctuations; customer demand 
for our services; regulatory matters affecting manufacturing and 
pharmaceutical development services; impacts of acquisitions, divestitures, 
restructurings, and other strategic transactions (including our proposed 
transaction with JLL/Delta Patheon Holdings, L.P.), including our ability to 
achieve our intended objectives with respect to such transactions and 
integrate businesses that we may acquire or combine with; implementation of 
our operational excellence initiatives and transformation activities; our 
ability to effectively transfer business between facilities; the global 
economic environment; our exposure to complex production issues; our 
substantial financial leverage; interest rate risks; potential environmental, 
health and safety liabilities; credit and customer concentration; competition; 
rapid technological change; product liability claims; intellectual property; 
the fact that we have a majority shareholder that can exercise significant 
influence over us; supply arrangements; pension plans; derivative financial 
instruments; and our dependence upon key management, scientific and technical 
personnel. For additional information regarding risks and uncertainties that 
could affect our business, please see Item 1A "Risk Factors" of our Annual 
Report on Form 10-K for the fiscal year ended October 31, 2013, and our other 
filings with the U.S. Securities and Exchange Commission and the Canadian 
Securities Administrators. Although we have attempted to identify important 
risks and factors that could cause actual actions, events or results to differ 
materially from those described in forward-looking statements, there may be 
other factors and risks that cause actions, events or results not to be as 
anticipated, estimated or intended. There can be no assurance that 
forward-looking statements will prove to be accurate, as actual results and 
future events could differ materially from those anticipated in such 
statements. These forward-looking statements are made as of the date of this 
annual report on Form 10-K, and except as required by law, we assume no 
obligation to update or revise them to reflect new events or circumstances.   

 
    
                                           Patheon Inc.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                      
                                       Twelve months ended October 31,
                                           2013       2012        2011

(in millions of U.S. dollars, except                        
loss per share)                               $          $           $
                                                                      

Revenues                                1,023.1      749.1       700.0

Cost of goods sold                        774.0      589.8       568.2

Gross profit                              249.1      159.3       131.8

Selling, general and administrative                         
expenses                                  163.6      128.6       120.2

Research and development                   10.9          -           -

Repositioning expenses                     15.8        6.1         7.0

Acquisition and integration costs          13.1        3.2           -

Impairment charge                          13.1       57.9           -

(Gain) loss on sale of fixed assets       (1.3)        0.4         0.2

Operating income (loss)                    33.9     (36.9)         4.4

Interest expense, net                      47.8       26.5        25.6

Foreign exchange loss (gain)                0.8        0.5       (1.6)

Refinancing expenses                       29.2          -           -

Other income, net                         (1.6)      (0.9)       (4.9)

Loss from continuing operations before                      
income taxes                             (42.3)     (63.0)      (14.7)

Current                                     8.7        9.2         1.6

Future                                   (15.3)       34.2       (0.5)

(Benefit from) provision for income                         
taxes                                     (6.6)       43.4         1.1

Loss from continuing operations          (35.7)    (106.4)      (15.8)

Loss from discontinued operations         (0.2)      (0.3)       (0.6)

Net loss for the period                  (35.9)    (106.7)      (16.4)

Net loss attributable to restricted                         
voting shareholders                      (35.9)    (106.7)      (16.4)
                                                                      

Basic and diluted loss per share                                      

  From continuing operations           ($0.255)   ($0.821)    ($0.122)

  From discontinued operations         ($0.001)   ($0.002)    ($0.005)
                                       ($0.256)   ($0.823)    ($0.127)
                                                                      

Weighted-average number of shares
outstanding during period -                                 

basic and diluted (in thousands)        140,072    129,639     129,639

 
    
                                            Patheon Inc.
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                               Years ended October 31,
                                                                       
                                                2013      2012     2011

(in millions of U.S. dollars)                      $         $        $
                                                                       

Operating activities                                                   

Loss from continuing operations               (35.7)   (106.4)   (15.8)

  Add (deduct) charges to operations not                        
  requiring a current cash payment                                     
    Depreciation and amortization               48.4      40.8     53.2
    Impairment charge                           13.1      57.9        -
    Other non-cash interest                      9.7       1.2      1.1
    Change in other long-term assets and                        
    liabilities                               (14.4)     (2.2)    (4.0)
    Deferred income taxes                     (15.3)      34.2    (0.6)
    Amortization of deferred revenues         (18.3)    (13.1)   (45.0)
    (Gain) loss on sale of capital assets      (1.3)       0.4      0.2
    Stock-based compensation expense             3.2       3.1      3.5
    Excess tax benefit from share-based                         
    payment arrangements                       (1.0)         -        -
    Other                                      (1.3)     (0.9)    (0.1)
                                              (12.9)      15.0    (7.5)

  Net change in non-cash working capital                        
  balances related to continuing operations      8.8     (6.8)      1.0

  Increase in deferred revenues                 17.3      25.2     30.4

  Cash provided by operating activities of                      
  continuing operations                         13.2      33.4     23.9

  Cash used in operating activities of                          
  discontinued operations                      (0.2)     (0.4)    (1.0)

Cash provided by operating activities           13.0      33.0     22.9
                                                                       

Investing activities                                                   

  Additions to capital assets                 (49.8)    (53.4)   (47.8)

  Proceeds on sale of capital assets             6.6       0.4      0.4

  Proceeds on sale of business, net                -       1.0        -

  Acquisitions, net of cash acquired         (256.1)         -        -

  Cash used in investing activities of                          
  continuing operations                      (299.3)    (52.0)   (47.4)

  Cash provided by investing activities of                      
  discontinued operations                          -       0.1        -

Cash used in investing activities            (299.3)    (51.9)   (47.4)
                                                                       

Financing activities                                                   

  (Decrease) increase in short-term                             
  borrowings                                       -     (3.8)      4.2

  Proceeds from long-term borrowings           647.0      40.9     13.5

  Increase in deferred financing costs        (22.7)         -        -

  Repayment of debt, net of penalty          (353.5)    (11.1)   (15.0)

  Share issue cost                             (0.8)         -        -

  Proceeds on issuance of restricted voting                     
  shares                                        35.9       0.3        -

  Excess tax benefit from share-based                           
  payment arrangements                           1.0         -        -

  Cash provided by financing activities of                      
  continuing operations                        306.9      26.3      2.7

Cash provided by financing activities          306.9      26.3      2.7
                                                                       
                                                                       

Effect of exchange rate changes on cash and                     
cash equivalents                                 1.6     (1.4)      1.7
                                                                       

Net increase (decrease) in cash and cash                        
equivalents during the period                   22.2       6.0   (20.1)

Cash and cash equivalents, beginning of                         
period                                          39.4      33.4     53.5

Cash and cash equivalents, end of period        61.6      39.4     33.4
                                                                       

Supplemental cash flow information                                     

Interest paid                                   42.1      25.4     25.0

Income taxes paid (received), net               13.3       2.2    (1.3)

    
                                            Patheon Inc.
                              ADJUSTED EBITDA RECONCILIATION
                                           Twelve months ended October 31,
                                          2013        2012         2011

(in millions of U.S. dollars)                $           $            $

Loss from continuing operations         (35.7)     (106.4)       (15.8)

Add (deduct):                                                          

  (Benefit from) provision for income                       
  taxes                                  (6.6)        43.4          1.1

  (Gain) loss on sale of capital                            
  assets                                 (1.3)         0.4          0.2

  Acquisition and integration costs       20.2         3.2     — 

  Refinancing expenses                    29.2    —      — 

  Interest expense, net                   47.8        26.5         25.6

  Repositioning expenses                  15.8         6.1          7.0

  Depreciation and amortization           48.4        40.8         53.2

  Impairment charge                       13.1        57.9     — 

  Operational initiatives related                           
  consulting costs                         2.3        13.3          9.0

  Acquisition-related litigation                            
  expenses                                 6.4    —      — 

  Stock-based compensation expense         3.2         3.1          3.5

  Purchase accounting adjustments          5.0    —      — 

  Other                                  (1.6)       (0.9)        (4.9)

Adjusted EBITDA                          146.2        87.4         78.9

 

SOURCE Patheon Inc.

Contact: Patheon Inc. Tel: (919) 226-3200 Email: investorrelations@patheon.com

To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/January2014/10/c8141.html

CO: Patheon Inc. ST: Ontario NI: MTC ERN

-0- Jan/11/2014 01:15 GMT

Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement