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 withJLL/Delta Patheon Holdings, L.P.,a limited partnership under  whichPatheonwill be taken private pursuant to a court-approved plan of  arrangement under theCanada Business Corporations Act.The new company has  not been named and is being called NewCo. NewCowill 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. NewCois sponsored by an entity controlled byJLL  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 ofBanner Pharmacaps- a market leader in soft gelatin capsule  technology -Patheonnow also includes a proprietary products and technology  business.  Patheonprovides 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 acrossNorth  AmericaandEurope.Patheonenables customer products to be launched with  confidence anywhere in the world. For more information, visitwww.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  
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