— Achieves Record Quarterly Revenues and EBITDA1 —
MONTREAL, Aug. 11, 2022 — 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, 2022. All currency amounts are in thousands except for share and per share amounts. All currencies are Canadian unless otherwise specified.
Q2 2022 Highlights
Financials
- Revenues were $75,820, an increase of $10,024 or 15% over the same period in prior year.
- Gross margin of $38,295 or 51% compared to $28,871 or 44% in the same period in prior year.
- Adjusted EBITDA1 was $17,890, an increase of $8,494 or 90% over the same period in prior year.
- Net loss on financial assets measured at fair value through profit or loss of $7,692.
- Net income was $2,516, compared to net income of $29,004 in the same period in prior year.
- Cash inflow from operations was $11,521, compared to a cash inflow from operations of $12,409 in the same period in prior year.
Corporate Developments
- Purchased 1,460,684 common shares through Knight’s normal course issuer bid (“NCIB”) at an average price of $5.30 for an aggregate cash consideration of $7,739.
- 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 license, distribution and supply agreement with Helsinn Healthcare SA (“Helsinn”) for AKYNZEO® oral/IV (netupitant/palonosetron/fosnetupitant/palonosetron) in Canada, Brazil and select LATAM countries and ALOXI® oral/IV (palonosetron) in Canada.
- Entered into exclusive license and supply agreements with Rigel Pharmaceuticals (“Rigel”) to commercialize fostamatinib in LATAM.
- Obtained marketing authorization transfer of Exelon® from Novartis to Knight in Colombia, Brazil, and Mexico, and transferred Exelon®’s commercial activities from Novartis to Knight’s affiliate in Colombia.
Subsequent Events
- Relaunched AKYNZEO® in Brazil in July 2022.
- Transferred marketing authorization of Exelon® from Novartis to Knight’s affiliate in Chile.
- Executed a settlement agreement with former controlling shareholders of GBT and will receive US$4.6 million.
- Launched a NCIB in July 2022 to purchase up to 7,988,986 common shares of the Company over the next 12 months.
“I am excited to announce that Knight achieved record quarterly revenues this quarter and see continuous growth in each of our key therapeutic categories primarily driven by the lifting of COVID-19 restrictions as well as the impact of the acquisition of Exelon®. Almost one year after closing that transaction, we have completed the Exelon® marketing authorization transfers to Knight in our key LATAM territories and have assumed Exelon® commercial activities in Colombia. We also continued to execute on the business development front and entered into exclusive license, distribution and supply agreements with Helsinn and Rigel in our key territories,”, said Samira Sakhia, President and Chief Executive Officer of Knight Therapeutics Inc.
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1 EBITDA and Adjusted EBITDA are a non-GAAP measures, refer to section “Non-GAAP measures” and “Reconciliation to adjusted EBITDA” for additional details
SELECT FINANCIAL RESULTS
[In thousands of Canadian dollars]
| Change | Change | |||||||||||||||
| Q2-22 | Q2-21 | $1 | %2 | YTD-22 | YTD-21 | $1 | %2 | |||||||||
| Revenues | 75,820 | 65,796 | 10,024 | 15% | 139,627 | 111,865 | 27,762 | 25% | ||||||||
| Gross margin | 38,295 | 28,871 | 9,424 | 33% | 70,772 | 49,451 | 21,321 | 43% | ||||||||
| Gross margin % | 51% | 44% | 51% | 44% | ||||||||||||
| Operating expenses4 | 35,959 | 28,855 | 7,104 | 25% | 68,752 | 51,670 | 17,082 | 33% | ||||||||
| Net income (loss) | 2,516 | 29,004 | (26,488 | ) | 91% | (16,295 | ) | 32,562 | (48,857 | ) | 150% | |||||
| EBITDA3 | 17,890 | 9,271 | 8,619 | 93% | 31,202 | 14,431 | 16,771 | 116% | ||||||||
| Adjusted EBITDA3 | 17,890 | 9,396 | 8,494 | 90% | 31,202 | 14,975 | 16,227 | 108% | ||||||||
- A positive variance represents a positive impact to net income (loss) and a negative variance represents a negative impact to net income (loss)
- Percentage change is presented in absolute values
- EBITDA and adjusted EBITDA are non-GAAP measures, refer to the definitions in section “Non-GAAP measures” for additional details
- Operating expenses include selling and marketing expenses, general and administrative expenses, research and development expenses, amortization and impairment of intangible assets
SELECT BALANCE SHEET ITEMS
[In thousands of Canadian dollars]
| Change | ||||||
| 06-30-22 | 12-31-21 | $ | %1 | |||
| Cash, cash equivalents and marketable securities | 136,235 | 149,502 | (13,267 | ) | 9 | % |
| Trade and other receivables | 131,570 | 103,875 | 27,695 | 27 | % | |
| Inventory | 76,400 | 72,397 | 4,003 | 6 | % | |
| Financial assets | 162,306 | 192,443 | (30,137 | ) | 16 | % |
| Accounts payable and accrued liabilities | 82,635 | 65,590 | 17,045 | 26 | % | |
| Bank loans | 32,483 | 35,927 | (3,444 | ) | 10 | % |
- Percentage change is presented in absolute values
Revenues: For the quarter ended June 30, 2022 revenues increased by $10,024 or 15% compared to the same period in prior year. The growth in revenues excluding the impact of hyperinflation was $9,836 or 15% and is explained by the following:
- Knight recognized revenues of $12,390 for Exelon®, an increase of $8,202 or 200% driven by the following factors:
- The timing of the acquisition of Exelon® executed on May 26, 2021
- Estimated increase in revenues between $4,000 to $4,500 driven by the purchasing pattern of certain customers as well as higher sales in Brazil in anticipation of the transfer of commercial activities from Novartis to Knight
- An increase in revenues of $1,634 driven by the growth of recently launched products including the Q1-22 launches of Lenvima®, Rembre® and Halaven® in Colombia, an increase in patient treatments as our markets reduce COVID-19 restrictions and buying patterns offset by a decrease in revenues of certain of our oncology branded generics products due to market entrance of new competitors. In addition, revenues decreased by approximately $4,500 to $6,000 due to lower demand of certain of our infectious diseases products associated with COVID-19.
Gross margin: For the quarter ended June 30, 2022, gross margin increased from 44% to 51% explained by a change in product mix as well as the acquisition of Exelon®. The revenues of Exelon® is recorded as a net profit transfer from Novartis with the exception of revenues generated in Colombia upon the transfer of commercial activities to Knight in June 2022. The gross margin would have been 54% versus 51% (YTD-21: 44% to 46%) after excluding the adjustment of hyperinflation accounting in accordance with IAS 29.
Knight expects gross margin as a % of revenues to decline over the next quarters as the commercial activities of Exelon® are transferred to Knight on a country-by-country basis and the Company records revenues with related cost of sales instead of a net profit transfer.
Selling and marketing: For the quarter ended June 30, 2022, S&M expenses were $10,926, an increase of $1,742 or 19%, compared to the same period in prior year due to an increase in compensation expenses, certain variable costs such as logistics fees as well as an increase in selling and marketing activities related to key promoted products and Exelon®.
General and administrative: For the quarter ended June 30, 2022, G&A expenses were $10,566, an increased of $1,115 or 12%, compared to the same period in prior year due to an increase in compensation expense, certain consulting and professional fees partially offset by the lower costs of related to stock options
Research and development: For the quarter ended June 30, 2022, R&D expenses were $3,412, an increase of $827 or 32%, compared to the same period in prior year. The variance is not significant.
Amortization of intangible assets: For the quarter ended June 30, 2022, amortization of intangible assets was $11,055, an increase of $3,420 or 45%, compared to the same period in prior year driven by acquisition of Exelon®.
Interest income: Interest income is the sum of interest income on financial instruments measured at amortized cost and other interest income. For the quarter ended June 30, 2022, interest income was $2,427, an increase of 36% or $641, compared to the same period in prior year due to higher interest rates.
Interest expense: For the quarter ended June 30, 2022, interest expense was $1,717, an increase of $1,049 or 157%, compared to the same period in prior year due to higher interest rates partially offset by a lower average bank loan balance.
Adjusted EBITDA: For the quarter ended June 30, 2022, adjusted EBITDA increased by $8,494 or 90%. The growth in adjusted EBITDA is driven by an increase in gross margin of $9,424, offset by an increase in operating expenses.
Net loss or income: For the quarter ended June 30, 2022, net income was $2,516 compared to net income of $29,004 for the same period in prior year. The variance mainly resulted from the above-mentioned items and (1) a net loss on the revaluation of financial assets measured at fair value through profit or loss of $7,692 versus a net gain of $28,472 in the same period in prior year, mainly due to unrealized revaluations of the strategic fund investments, offset by (2) a foreign exchange gain of $4,507 mainly due to the unrealized gains on intercompany balances driven by the appreciation of the USD compared to a foreign exchange loss of $3,194 in the same period in prior year mainly due to depreciation of the USD.
Cash, cash equivalents and marketable securities: As at June 30, 2022, Knight had $136,235 in cash, cash equivalents and marketable securities, a decrease of $13,267 or 9% as compared to December 31, 2021. The variance is primarily due to outflows related to due to upfront payments and certain milestones mainly related to in-licensing of AKYNZEO® and ALOXI® from Helsinn as well as fostamatinib from Rigel, shares repurchased through NCIB, partially offset by cash inflows from operating activities.
Financial assets: As at June 30, 2022, financial assets were at $162,306, a decrease of $30,137 or 16%, as compared to the prior year, mainly due to negative mark-to-market adjustments of $23,520 driven by the decline in the share prices of the publicly-traded equities of our strategic fund investments due to general market conditions and distributions of $4,336. Given the nature of the fund investments there could be significant fluctuations in the fair value of the underlying assets.
Bank Loans: As at June 30, 2022, bank loans were at $32,483, a decrease of $3,444 or 10% as compared to the prior period, due to loan repayments of $5,391, partially offset by the appreciation of BRL and accrued interest.
Product Updates
The marketing authorizations of Exelon® for Colombia, Mexico, Chile and Brazil were transferred to Knight. The Company expects that remaining marketing authorizations will be transferred in the second half of 2022. Furthermore, Knight has assumed the commercial activities of Exelon® in Colombia and expects to assume commercial activities in Brazil, Mexico and Chile in Q3-22.
Knight entered into an exclusive license, distribution and supply agreement with Helsinn for AKYNZEO® oral/IV (netupitant/palonosetron / fosnetupitant/palonosetron) in Canada, Brazil and select LATAM countries and ALOXI® oral/IV (palonosetron) in Canada. AKYNZEO® oral is approved and marketed in Canada for the prevention of acute and delayed nausea and vomiting associated with highly emetogenic cancer chemotherapy and the prevention of acute nausea and vomiting associated with moderately emetogenic cancer therapy that is uncontrolled by a 5-HT3 receptor antagonist alone in adults. AKYNZEO® oral is also approved and marketed in Argentina and Brazil for the prevention of acute and delayed nausea and vomiting associated with highly emetogenic cisplatin-based cancer chemotherapy and prevention of acute and delayed nausea and vomiting associated with moderately emetogenic cancer chemotherapy in adults. ALOXI® solution for injection is approved and marketed in Canada for the prevention of acute and delayed nausea and vomiting associated with moderately emetogenic cancer chemotherapy and highly emetogenic cancer chemotherapy, including high dose cisplatin in adults. In Canada, the product is also indicated in pediatric patients aged 2 to 17 years for the prevention of acute nausea and vomiting associated with moderately and highly emetogenic cancer chemotherapy. ALOXI® oral is approved in Canada for use in adults for the prevention of acute nausea and vomiting associated with moderately emetogenic cancer chemotherapy. According to IQVIA, sales of AKYNZEO® in Canada and Brazil were approximately $7 million in 2021. Knight assumed commercial activities of AKYNZEO® in Brazil and Argentina in July 2022 and will begin commercial activities following a transition period from Helsinn’s current licensees in Canada.
Knight entered into exclusive license and supply agreements with Rigel Pharmaceuticals for the exclusive rights to commercialize fostamatinib, an oral spleen tyrosine kinase (SYK) inhibitor, in Latin America. Fostamatinib is commercially available in the United States under the brand name TAVALISSE® and in Europe under the brand name TAVLESSE® for the treatment of chronic immune thrombocytopenia. On June 8, 2022, Rigel announced topline efficacy and safety data from the Phase 3 clinical trial of fostamatinib in patients with warm autoimmune hemolytic anemia (wAIHA). The trial did not demonstrate statistical significance in the primary efficacy endpoint of durable hemoglobin response in the overall study population. The safety profile was consistent with prior clinical experience, and no new safety issues were identified. Rigel is conducting an in-depth analysis of this data to better understand differences in patient characteristics and outcomes and expects to discuss these findings with the FDA to determine the path forward in wAIHA. Fostamatinib is also in Phase 3 clinical trials for the treatment of hospitalized patients with COVID-191,2.
_______________
1 Clinicaltrials.gov: NCT04629703
2 Clinicaltrials.gov: NCT04924660
Corporate Updates
NCIB
On July 12, 2022, the Company announced that the Toronto Stock Exchange approved its notice of intention to launch a NCIB (“2022 NCIB”). Under the terms of the 2022 NCIB, Knight may purchase for cancellation up to 7,988,986 common shares of the Company which represented 10% of its public float as at June 30, 2022. The 2022 NCIB commenced on July 14, 2022 and will end on the earlier of July 13, 2023 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. Under Knight’s automatic share purchase plan, the broker may purchase common shares which would ordinarily not be permitted due to regulatory restrictions or self-imposed blackout periods.
For the three-month period ended June 30, 2022, the Company purchased 1,460,684 common shares at an average price of $5.30 for an aggregate cash consideration of $7,739. The Company did not acquire any common shares subsequent to the quarter ended June 30, 2022.
Settlement Agreement
Knight executed a settlement agreement and general release (“Settlement Agreement”) with the former shareholders of GBT. The Company made certain claims (“Claims”) with respect to its indemnification rights under the purchase agreement for the acquisition of GBT. Under the Settlement Agreement, Knight will receive $5.9 million (US$4.6 million) as settlement for the Claims, which will be recorded in the Statement of Income.
Conference Call Notice
Knight will host a conference call and audio webcast to discuss its second quarter ended June 30, 2022, today at 8:30 am ET. Knight cordially invites all interested parties to participate in this call.
Date: Thursday, August 11, 2022
Time: 8:30 a.m. ET
Telephone: Toll Free: 1-855-669-9657 or International 1-412-317-0790
Webcast: www.gud-knight.com or Webcast
This 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.gud-knight.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.gud-knight.com or www.sedar.com.
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, 2021 as filed on www.sedar.com. 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: info@knighttx.com | Email: info@knighttx.com |
| Website: www.gud-knight.com | Website: www.gud-knight.com |
IMPACT OF HYPERINFLATION
[In thousands of Canadian dollars]
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. If the Company did not apply IAS 29, the effect on the Company’s operating income would be as follows:
| Q2-22 | YTD-22 | |||||||||||||||
| Reported under IFRS |
Excluding impact of IAS 291 |
Variance |
Reported under IFRS |
Excluding impact of IAS 291 |
Variance |
|||||||||||
| $2 | %3 | $2 | %3 | |||||||||||||
| Revenues | 75,820 | 75,021 | 799 | 1% | 139,627 | 138,855 | 772 | 1% | ||||||||
| Cost of goods sold | 37,525 | 34,199 | (3,326 | ) | 10% | 68,855 | 64,222 | (4,633 | ) | 7% | ||||||
| Gross margin | 38,295 | 40,822 | (2,527 | ) | 6% | 70,772 | 74,633 | (3,861 | ) | 5% | ||||||
| Gross margin (%) | 51% | 54% | 51% | 54% | ||||||||||||
| Expenses | ||||||||||||||||
| Selling and marketing | 10,926 | 10,740 | (186 | ) | 2% | 20,616 | 20,439 | (177 | ) | 1% | ||||||
| General and administrative | 10,566 | 9,716 | (850 | ) | 9% | 19,398 | 18,261 | (1,137 | ) | 6% | ||||||
| Research and development | 3,412 | 3,165 | (247 | ) | 8% | 6,395 | 6,007 | (388 | ) | 6% | ||||||
| Amortization of intangible assets | 11,055 | 10,499 | (556 | ) | 5% | 22,343 | 21,372 | (971 | ) | 5% | ||||||
| Operating income | 2,336 | 6,702 | (4,366 | ) | 65% | 2,020 | 8,554 | (6,534 | ) | 76% | ||||||
- Financial results excluding the impact of hyperinflation (IAS 29) is a non-GAAP measure. Refer to the definitions in section “Non-GAAP measures” for additional details
- A positive variance represents a positive impact to net income due to the application of IAS 29 and a negative variance represents a negative impact to net income due to the application of IAS 29
- Percentage change is presented in absolute values
NON-GAAP MEASURES
[In thousands of Canadian dollars]
Non-GAAP measures
The Company discloses non-GAAP measures 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 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. 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/financial results at constant currency allow revenues/financial 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/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.
EBITDA: 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.
Adjusted EBITDA: EBITDA adjusted for acquisition costs and non-recurring expenses.
Adjustments include the following:
- With the adoption of IFRS 16, the lease payments of Knight are not reflected in operating expenses. The IFRS 16 adjustment approximates the cash outflow related to leases of Knight.
- Acquisition costs relate to costs incurred on legal, consulting and advisory fees for the acquisition of GBT and the acquisition of products.
- Other non-recurring expenses relate to expenses incurred by Knight that are not due to, and are not expected to occur in, the ordinary course of business.
For the three and six-month periods ended June 30, the Company calculated EBITDA and adjusted EBITDA as follows:
| Change |
Change | |||||||||||||||
| Q2-22 | Q2-21 | $1 | %2 | YTD-22 | YTD-21 | $1 | %2 | |||||||||
| Operating income (loss) | 2,336 | 16 | 2,320 | 14500 | % | 2,020 | (2,219 | ) | 4,239 | 191 | % | |||||
| Adjustments to operating income (loss): | ||||||||||||||||
| Amortization of intangible assets | 11,055 | 7,635 | 3,420 | 45 | % | 22,343 | 12,937 | 9,406 | 73 | % | ||||||
| Depreciation of property, plant and equipment and ROU assets | 2,723 | 1,576 | 1,147 | 73 | % | 4,816 | 2,982 | 1,834 | 62 | % | ||||||
| Lease costs (IFRS 16 adjustment) | (643 | ) | (703 | ) | 60 | 9 | % | (1,289 | ) | (1,397 | ) | 108 | 8 | % | ||
| Impact of IAS 29 | 2,419 | 747 | 1,672 | 224 | % | 3,312 | 2,128 | 1,184 | 56 | % | ||||||
| EBITDA3 | 17,890 | 9,271 | 8,619 | 93 | % | 31,202 | 14,431 | 16,771 | 116 | % | ||||||
| Acquisition and transaction costs | – | 82 | (82 | ) | 100 | % | – | 432 | (432 | ) | 100 | % | ||||
| Other non-recurring expenses | – | 43 | (43 | ) | 100 | % | – | 112 | (112 | ) | 100 | % | ||||
| Adjusted EBITDA3 | 17,890 | 9,396 | 8,494 | 90 | % | 31,202 | 14,975 | 16,227 | 108 | % | ||||||
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 EBITDA and adjusted EBITDA are non-GAAP measures, refer to the definitions in section “Non-GAAP measures” for additional details
INTERIM CONSOLIDATED BALANCE SHEETS
[In thousands of Canadian dollars]
[Unaudited]
| As at | June 30, 2022 | December 31, 2021 |
| ASSETS | ||
| Current | ||
| Cash and cash equivalents | 93,119 | 85,963 |
| Marketable securities | 43,116 | 63,539 |
| Trade receivables | 78,387 | 55,388 |
| Other receivables | 8,623 | 5,056 |
| Inventories | 76,400 | 72,397 |
| Prepaids and deposits | 2,004 | 2,165 |
| Other current financial assets | 13,696 | 13,491 |
| Income taxes receivable | 5,006 | 6,970 |
| Total current assets | 320,351 | 304,969 |
| Prepaids and deposits | 3,104 | 3,046 |
| Right-of-use assets | 5,587 | 4,671 |
| Property, plant and equipment | 26,844 | 25,265 |
| Investment properties | 1,479 | 1,457 |
| Intangible assets | 365,115 | 350,299 |
| Goodwill | 79,818 | 75,403 |
| Other financial assets | 148,610 | 178,952 |
| Deferred income tax assets | 3,844 | 2,048 |
| Other long-term receivables | 44,560 | 43,431 |
| 678,961 | 684,572 | |
| Assets held for sale | 1,822 | 2,350 |
| Total assets | 1,001,134 | 991,891 |
INTERIM CONSOLIDATED BALANCE SHEETS (continued)
[In thousands of Canadian dollars]
[Unaudited]
| As at | June 30, 2022 | December 31, 2021 | ||
| LIABILITIES AND EQUITY | ||||
| Current | ||||
| Accounts payable and accrued liabilities | 82,402 | 65,309 | ||
| Lease liabilities | 2,018 | 1,614 | ||
| Other liabilities | 3,361 | 1,989 | ||
| Bank loans | 24,335 | 26,662 | ||
| Income taxes payable | 3,439 | 7,073 | ||
| Other balances payable | 10,479 | 2,655 | ||
| Total current liabilities | 126,034 | 105,302 | ||
| Accounts payable and accrued liabilities | 233 | 281 | ||
| Lease liabilities | 3,713 | 3,417 | ||
| Bank loan | 8,148 | 9,265 | ||
| Other balances payable | 24,304 | 19,235 | ||
| Deferred income tax liabilities | 9,013 | 12,373 | ||
| Total liabilities | 171,445 | 149,873 | ||
| Shareholders’ Equity | ||||
| Share capital | 611,967 | 628,854 | ||
| Warrants | 117 | 117 | ||
| Contributed surplus | 22,936 | 21,776 | ||
| Accumulated other comprehensive loss | 19,166 | (376 | ) | |
| Retained earnings | 175,503 | 191,647 | ||
| Total shareholders’ equity | 829,689 | 842,018 | ||
| Total liabilities and shareholders’ equity | 1,001,134 | 991,891 | ||
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, |
||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||
| Revenues | 75,820 | 65,796 | 139,627 | 111,865 | |||||
| Cost of goods sold | 37,525 | 36,925 | 68,855 | 62,414 | |||||
| Gross margin | 38,295 | 28,871 | 70,772 | 49,451 | |||||
| Expenses | |||||||||
| Selling and marketing | 10,926 | 9,184 | 20,616 | 16,797 | |||||
| General and administrative | 10,566 | 9,451 | 19,398 | 16,533 | |||||
| Research and development | 3,412 | 2,585 | 6,395 | 5,403 | |||||
| Amortization of intangible assets | 11,055 | 7,635 | 22,343 | 12,937 | |||||
| Operating income (loss) | 2,336 | 16 | 2,020 | (2,219 | ) | ||||
| Interest income on financial instruments measured at amortized cost | (708 | ) | (647 | ) | (1,054 | ) | (1,533 | ) | |
| Other interest income | (1,719 | ) | (1,139 | ) | (2,853 | ) | (2,251 | ) | |
| Interest expense | 1,717 | 668 | 2,828 | 1,328 | |||||
| Other (income) expense | (219 | ) | 19 | (129 | ) | (93 | ) | ||
| Net loss (gain) on financial instruments measured at fair value through profit or loss | 7,692 | (28,472 | ) | 24,055 | (37,945 | ) | |||
| Foreign exchange (gain) loss | (4,507 | ) | 3,194 | 1,682 | 7,395 | ||||
| Gain on hyperinflation | (556 | ) | (182 | ) | (833 | ) | (122 | ) | |
| Income (loss) before income taxes | 636 | 26,575 | (21,676 | ) | 31,002 | ||||
| Income tax | |||||||||
| Current | 798 | (706 | ) | 971 | (58 | ) | |||
| Deferred | (2,678 | ) | (1,723 | ) | (6,352 | ) | (1,502 | ) | |
| Income tax recovery | (1,880 | ) | (2,429 | ) | (5,381 | ) | (1,560 | ) | |
| Net income (loss) for the period | 2,516 | 29,004 | (16,295 | ) | 32,562 | ||||
| Attributable to shareholders of the Company | |||||||||
| Basic net earnings (loss) per share | 0.02 | 0.23 | (0.14 | ) | 0.26 | ||||
| Diluted net earnings (loss) per share | 0.02 | 0.23 | (0.14 | ) | 0.26 | ||||
| Weighted average number of common shares outstanding | |||||||||
| Basic | 115,082,184 | 125,971,873 | 116,127,721 | 127,406,628 | |||||
| Diluted | 115,177,789 | 126,009,078 | 116,127,721 | 127,443,974 | |||||
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
[In thousands of Canadian dollars]
[Unaudited]
| Three months ended June 30, | Six months ended June 30, |
|||||||
| 2022 | 2021 | 2022 | 2021 | |||||
| OPERATING ACTIVITIES | ||||||||
| Net (loss) income for the period | 2,516 | 29,004 | (16,295 | ) | 32,562 | |||
| Adjustments reconciling net income to operating cash flows: | ||||||||
| Depreciation and amortization | 13,778 | 9,030 | 27,159 | 15,738 | ||||
| Net gain on financial instruments | 7,692 | (28,472 | ) | 24,055 | (37,945 | ) | ||
| Unrealized foreign exchange loss | (5,981 | ) | 699 | 669 | 5,356 | |||
| Other operating activities | (714 | ) | 603 | (3,186 | ) | 2,055 | ||
| 17,291 | 10,864 | 32,402 | 17,766 | |||||
| Changes in non-cash working capital and other items | (5,770 | ) | 1,545 | (8,002 | ) | 11,850 | ||
| Cash inflow from operating activities | 11,521 | 12,409 | 24,400 | 29,616 | ||||
| INVESTING ACTIVITIES | ||||||||
| Purchase of marketable securities | (43,427 | ) | (16,103 | ) | (59,235 | ) | (47,895 | ) |
| Proceeds on maturity of marketable securities | 43,324 | 63,740 | 79,870 | 146,896 | ||||
| Investment in funds | (413 | ) | (4,016 | ) | (453 | ) | (5,604 | ) |
| Proceeds from distribution of funds | 3,178 | 7,034 | 3,178 | 11,370 | ||||
| Purchase of intangible assets | (18,216 | ) | (217,871 | ) | (18,450 | ) | (218,493 | ) |
| Other investing activities | (23 | ) | 2,258 | 331 | 4,688 | |||
| Cash inflow from investing activities | (15,577 | ) | (164,958 | ) | 5,241 | (109,038 | ) | |
| FINANCING ACTIVITIES | ||||||||
| Repurchase of common shares through Normal Course Issuer Bid | (10,259 | ) | (4,494 | ) | (16,922 | ) | (23,043 | ) |
| Principal repayment on bank loans | (5,391 | ) | (6,063 | ) | (5,391 | ) | (14,911 | ) |
| Proceeds from bank loans | – | – | 422 | – | ||||
| Other financing activities | (555 | ) | (633 | ) | (1,126 | ) | (1,263 | ) |
| Cash outflow from financing activities | (16,205 | ) | (11,190 | ) | (23,017 | ) | (39,217 | ) |
| (Decrease) increase in cash and cash equivalents during the period | (20,261 | ) | (163,739 | ) | 6,624 | (118,639 | ) | |
| Cash and cash equivalents, beginning of the period | 113,457 | 271,218 | 85,963 | 229,592 | ||||
| Net foreign exchange difference | (77 | ) | (4,897 | ) | 532 | (8,371 | ) | |
| Cash and cash equivalents, end of the period | 93,119 | 102,582 | 93,119 | 102,582 | ||||
| Cash and cash equivalents | 93,119 | 102,582 | ||||||
| Marketable securities | 43,116 | 63,539 | ||||||
| Total cash, cash equivalents and marketable securities | 136,235 | 166,121 | ||||||
