MONTREAL, March 23, 2023 (GLOBE NEWSWIRE) -- Knight Therapeutics Inc. (TSX: GUD) ("Knight" or “the Company”), a leading Pan-American (ex-US) specialty pharmaceutical company, today reported financial results for its fourth quarter and year ended December 31, 2022. All currency amounts are in thousands except for share and per share amounts. All currencies are Canadian unless otherwise specified.
Financial information as at and for the year ended December 31, 2022 is unaudited.
2022 Highlights
Financials
- Revenues were $293,563, an increase of $50,085 or 21% over prior year.
- Gross margin of $138,061 or 47% of revenues compared to $115,412 or 47% of revenues in prior year.
- Adjusted EBITDA1 was $54,032, an increase of $16,027 or 42% over prior year.
- Net loss on financial assets measured at fair value through profit or loss of $20,677.
- Net loss was $29,892, compared to net income of $15,675 in prior year.
- Cash inflow from operations was $40,481, compared to a cash inflow from operations of $44,618 in prior year.
Corporate Developments
- Entered into a five-year secured loan of $52,416 (US$38,500) loan denominated in select LATAM currencies with International Finance Corporation (“IFC”).
- Executed a settlement agreement with former controlling shareholders of GBT and received $6,030 (US$4,600).
- Launched a NCIB in July 2022 to purchase up to 7,988,986 common shares of the Company over the next 12 months.
- Purchased 5,649,189 common shares through Knight’s through Normal Course Issuer Bid (“NCIB”) at an average price of $5.34 for an aggregate cash consideration of $30,069.
- 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.
- Hired Leopoldo Bosano as VP Manufacturing and Operations.
Products
- Launched Lenvima®, Halaven® and Rembre® in Colombia in Q1-22.
- Entered into exclusive license and supply agreements with Rigel Pharmaceuticals to commercialize fostamatinib in LATAM in May 2022.
- 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 in May 2022.
- Relaunched AKYNZEO® in Canada, Brazil and Argentina, and ALOXI® oral/IV in Canada in second half of 2022.
- Transferred marketing authorization of Exelon® (rivastigmine) and assumed commercial activities in Brazil, Colombia, Argentina, Mexico, Chile, Peru, Ecuador, Canada and re-launched Exelon® in Brazil and certain other LATAM countries.
- Submitted tafasitamab in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) who are not eligible for autologous stem cell transplantation (ASCT) to ANVISA for regulatory approval in Brazil and Colombia in Q4-22 and Argentina in Q1-23.
- In-license three branded generics products for key territories in LATAM.
- Obtained regulatory approval for Palbocil® (palbociclib) in Argentina in Q4-22.
- Submitted two branded generic products (palbociclib and pomalidomide) for regulatory approval in Chile and Colombia in Q4-2022.
Subsequent Event
- Purchased an additional 1,279,900 common shares through NCIB for an aggregate cash consideration of $6,577.
_______________________
1 Adjusted EBITDA is a non-GAPP measure, refer to the definitions below in section “Non-Gaap measures” for additional details
“I am excited to announce that we delivered another record year in 2022, with revenues of over $290,000, an increase of 21% over last year and record adjusted EBITDA of over $54,000, an increase of 42% over last year. This growth was generated by the full year effect of Exelon® and the continued performance of our recent launches, including Lenvima®, Halaven® and Rembre® in Colombia. While delivering on record results, we have completed the transfer of the commercial activities to Knight for Exelon® and Akynzeo® in our key markets. We continued to advance our pipeline with the regulatory submission of tafasitamab in Brazil, Colombia and Argentina as well as two branded generic products in Chile and Colombia. In addition, to the in-licensing of Akynzeo®, we have expanded our pipeline portfolio in our key Latin America markets with fostamatinib and three branded generic products,” said Samira Sakhia, President and Chief Executive Officer of Knight Therapeutics Inc.
SELECT FINANCIAL RESULTS REPORTED UNDER IFRS
[In thousands of Canadian dollars]
[Unaudited]
| Change | Change | ||||||||||||||||
| Q4-22 | Q4-21 | $1 | %2 | YTD-22 | YTD-21 | $1 | %2 | ||||||||||
| Revenues | 81,655 | 58,273 | 23,382 | 40 | % | 293,563 | 243,478 | 50,085 | 21 | % | |||||||
| Gross margin | 36,888 | 28,195 | 8,693 | 31 | % | 138,061 | 115,412 | 22,649 | 20 | % | |||||||
| Operating expenses4 | 67,938 | 42,829 | (25,109 | ) | 59 | % | 179,105 | 128,244 | (50,861 | ) | 40 | % | |||||
| Net (loss) income | (15,188 | ) | (8,301 | ) | (6,887 | ) | 83 | % | (29,892 | ) | 15,675 | N/A | N/A | ||||
| EBITDA3 | 13,330 | 4,101 | 9,229 | 225 | % | 53,541 | 35,865 | 17,676 | 49 | % | |||||||
| Adjusted EBITDA3 | 13,821 | 5,696 | 8,125 | 143 | % | 54,032 | 38,005 | 16,027 | 42 | % | |||||||
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
4 Operating expenses include selling and marketing expenses, general and administrative expenses, research and development expenses, amortization and impairment of non current assets
SELECT FINANCIAL RESULTS AT CONSTANT CURRENCY
[In thousands of Canadian dollars]
[Unaudited]
| Q4-22 | Q4-21 | Variance | YTD-22 | YTD-21 | Variance | |||||||||||
| Excluding impact of IAS 293 | ||||||||||||||||
| Constant Currency3 | $1 | %2 | Constant Currency3 | $1 | %2 | |||||||||||
| Revenues | 83,806 | 58,370 | 25,436 | 44 | % | 291,770 | 243,731 | 48,039 | 20 | % | ||||||
| Gross margin | 41,931 | 29,692 | 12,239 | 41 | % | 150,359 | 120,694 | 29,665 | 25 | % | ||||||
| Operating expenses4 | 46,173 | 42,509 | (3,664 | ) | 9 | % | 151,158 | 124,865 | (26,293 | ) | 21 | % | ||||
| EBITDA3 | 13,330 | 4,258 | 9,072 | 213 | % | 53,541 | 36,376 | 17,165 | 47 | % | ||||||
| Adjusted EBITDA3 | 13,821 | 5,884 | 7,937 | 135 | % | 54,032 | 38,551 | 15,481 | 40 | % | ||||||
1 A positive variance represents a positive impact to adjusted EBITDA and a negative variance represents a negative impact to adjusted EBITDA
2 Percentage change is presented in absolute values
3 Financial results at constant currency and excluding impact of IAS 29, EBITDA and adjusted EBITDA are non GAAP measures, refer to the specific sections for additional details
4 Operating expenses include selling and marketing expenses, general and administrative expenses, research and development expenses, amortization and impairment of non-current assets
SELECT BALANCE SHEET ITEMS
[In thousands of Canadian dollars]
[Unaudited]
| Change | ||||||
| 12-31-22 | 12-31-21 | $ | %1 | |||
| Cash, cash equivalents and marketable securities | 172,674 | 149,502 | 23,172 | 15 | % | |
| Trade and other receivables | 151,669 | 103,875 | 47,794 | 46 | % | |
| Inventory | 92,489 | 72,397 | 20,092 | 28 | % | |
| Financial assets | 176,563 | 192,443 | (15,880 | ) | 8 | % |
| Accounts payable and accrued liabilities | 108,730 | 65,590 | 43,140 | 66 | % | |
| Bank loans | 70,072 | 35,927 | 34,145 | 95 | % | |
1 Percentage change is presented in absolute values
Revenues: For the quarter ended December 31, 2022, excluding the impact of hyperinflation, revenues increased by $27,448 or 49% compared to the same period in prior year. The increase in revenues excluding the impact of hyperinflation is explained by the following:
| Excluding impact of IAS 293 | ||||||
| Q4-22 | Q4-21 | Change | ||||
| Therapeutic Area | $ | $ | $1 | %2 | ||
| Oncology/Hematology | 29,343 | 23,534 | 5,809 | 25 | % | |
| Infectious Diseases | 32,744 | 20,211 | 12,533 | 62 | % | |
| Other Specialty | 21,760 | 12,613 | 9,147 | 73 | % | |
| Total | 83,806 | 56,358 | 27,448 | 49 | % | |
1 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
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.
- Oncology/hematology: The increase in revenues of $5,809 is driven by growth in our key promoted brands, including new launches of Lenvima® and Halaven® in Colombia in Q1-22, the growth of key promoted products including Lenvima® and Trelstar® and the assumption of commercial activities of Akynzeo® in Brazil and Canada. This increase is offset by a reduction in revenues of our branded generics products due to their lifecycle including the market entrance of new competitors.
- Infectious disease: The portfolio grew by approximately $15,900, excluding the impact of the planned transition and termination of the Gilead Amendment. This growth is due to an increase in patient treatments as our markets reduce COVID-19 restrictions, growth of our key promoted products and a one-time sales contract with the Ministry of Health in Brazil for Ambisome® (“MOH Contract”). Knight recorded $7,500 in revenues, which represents 40% of the expected deliveries under the MOH contract in Q4-22 and the balance of the contract is expected to be delivered in the first six months of 2023
- Other specialty: The growth is mainly due to the incremental revenue of $5,092 due to the change in accounting treatment of Exelon® from net profit transfer from Novartis to revenues with related cost of sales upon the transition of commercial activities to Knight as well as the timing of purchases of products by certain customers.
For the year ended December 31, 2022, excluding the impact of hyperinflation, revenues increased by $52,532 or 22% compared to the same period in prior year. The growth in revenues excluding the impact of hyperinflation is explained by the following:
| Excluding impact of IAS 293 | ||||||
| YTD-22 | YTD-21 | Change | ||||
| Therapeutic Area | $ | $ | $1 | %2 | ||
| Oncology/Hematology | 105,464 | 89,079 | 16,385 | 18 | % | |
| Infectious Diseases | 116,530 | 101,650 | 14,880 | 15 | % | |
| Other Specialty | 69,776 | 48,509 | 21,267 | 44 | % | |
| Total | 291,770 | 239,238 | 52,532 | 22 | % | |
1 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
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
- Oncology/hematology: The increase in revenues of $15,960 is driven by growth in our key promoted brands, including the launches of Lenvima® and Halaven® in Colombia in Q1-22, the continued growth of key promoted products including Lenvima®, Halaven® and Trelstar® and the assumption of commercial activities of Akynzeo® in Brazil and Canada. This increase is offset by a reduction in revenues of our branded generics products due to their lifecycle including the market entrance of new competitors.
- Infectious disease: The portfolio grew by approximately $29,080 due to increase in patient treatments as our markets reduce COVID-19 restrictions, growth of our key promoted products and a one-time sales contract with the Ministry of Health in Brazil for Ambisome® (“MOH Contract”). Knight recorded $7,500 in revenues, which represents 40% of the expected deliveries under the MOH contract in Q4-22 and the balance of the contract is expected to be delivered in the first six months of 2023. The growth is offset by an estimated $14,200 due to lower demand for certain of our infectious diseases products to treat invasive fungal infections associated with COVID-19 as well as the planned transition and termination agreement of the Gilead Amendment effective July 1, 2022.
- Other specialty: The increase is mainly driven by the timing of the acquisition of Exelon® as well as a change in the accounting treatment of Exelon®. The full year effect of the Exelon® transaction executed on May 26, 2021, represents an incremental revenue of $15,282. The change in accounting treatment from net profit transfer from Novartis to recognition of revenues with related cost of sales upon transition of commercial activities to Knight led to an increase of $6,427 in revenues.
Gross margin: For the quarter ended December 31, 2022, gross margin as a percentage of revenues was 45% compared to 48% in the same prior year period. The decrease in the gross margin, as a percentage of revenues, is explained by the impact of hyperinflation. Excluding the impact of IAS 29, gross margin, as a percentage of revenues, was 50% in Q4-22 and 51% in Q4-21.
For the year ended December 31, 2022, there was no significant difference in gross margin, as a percentage of revenues, compared to the same prior year period. Excluding the impact of IAS 29, gross margin, as a percentage of revenues, was 52% for year ended December 31, 2022 compared to 50% in prior year. The increase in the gross margin is explained by the change in product mix including the full year effect of the acquisition of Exelon®.
Selling and marketing: For the quarter ended December 31, 2022, S&M increased by $2,111 or 17%. Excluding the impact of IAS 29, the increase was $3,162 or 27% driven by an increase in compensation expenses including severance cost of $1,116 due to certain restructuring activities, an increase in selling and marketing activities related to key promoted products including spend on Exelon® and Akynzeo® as well as certain variable costs such as logistics fees due to higher sales.
For the year ended December 31, 2022, S&M increased by $9,396 or 24%. Excluding the impact of IAS 29, the increase is $9,827 or 26% mainly driven by an increase in compensation expenses including severances of $1,146, an increase in selling and marketing activities related to key promoted products including the spend on Exelon® and Akynzeo as well as certain variable costs such as logistics fees due to higher sales.
General and administrative: For the quarter ended on December 31, 2022, there was no significant variation in General and administrative expenses. For the year ended December 31, 2022, G&A increased by $4,852 or 14%. Excluding the impact of IAS 29, the increase is $3,721 or 11%, mainly driven by an increase in compensation expense certain consulting and professional fees offset by the lower costs related to the long-term incentive plan.
Research and development expenses: For the quarter ended on December 31, 2022, there was no significant variation in Research and development expenses. For the year ended December 31, 2022, R&D increased by $2,063 or 16%. Excluding the impact of IAS 29, the increase is $1,653 or 14%, mainly driven by an increase in compensation expenses and medical initiatives.
Amortization of intangible assets: For the year ended December 31, 2022, amortization of intangible assets increased by $10,566 or 26%, mainly explained by the amortization of $11,667 related to the full year effect of the acquisition of Exelon®.
Impairment of non-current assets: Under hyperinflation accounting, non-monetary assets including property plant and equipment, right-of-use assets and intangible assets are adjusted by the inflation index and converted back to Canadian Dollar (“CAD”) at the closing rate of the reporting period. During a period where the inflation index is higher than devaluation of the Argentine peso relative to the CAD, the value of the non-monetary assets increases when converted to CAD. During 2022, the increase in the value of non-monetary assets in Argentina due to hyperinflation accounting, resulted in an impairment of $21,654. The loss represents a write-down of certain right-of-use assets, property, plant and equipment in Argentina, and intangible assets related to branded generics intellectual property to its recoverable amount.
In addition, during 2022, the Company recorded an additional impairment loss of $2,330 representing the write-down of the upfront and certain milestones payments made under certain product license agreements as a result of changes in commercial expectations.
Interest income: Interest income is the sum of interest income on financial instruments measured at amortized cost and other interest income. For the quarter and year ended December 31, 2022, interest income was $4,263 and $10,632, an increase of 94% or $2,067 and 44% or $3,250 respectively, compared to the same period in prior year due to higher interest rates on cash and marketable securities as well as interest earned on strategic loans.
Interest expense: The increase for the quarter and year ended December 31, 2022, is due to the increase of the Certificados de Depositos Interfinancieros (Brazil interbank lending rate) (“CDI”) and Indicador Bancario de Referencia (Colombia interbank lending rate) (“IBR”) rates throughout 2022, partially offset by lower average loan balance due to partial repayment of Itaú Unibanco Brasil and Bancolombia bank loans.
In December 2022, the Company entered into a loan with IFC for an amount of $52,416 denominated in BRL, COP, CLP and MXN with interest rates ranging between 7.86% and 15.83% (“IFC Loan”). The interest expense on bank loans is expected to increase in 2023 due the IFC Loan as well as any future increases in variable interest rates.
Adjusted EBITDA: For the quarter ended December 31, 2022, adjusted EBITDA increased by $8,125 or 143%. The growth in adjusted EBITDA is driven by an increase in gross margin of $8,693, offset by an increase in operating expenses.
For the year ended December 31, 2022 adjusted EBITDA increased by $16,027 or 42%. The growth in adjusted EBITDA is driven by an increase in gross margin of $22,649 offset by an increase in operating expenses.
Net loss or income: For the quarter ended December 31, 2022, net loss was $15,188 compared to net loss of $8,301 for the same period last year. The increase in net loss mainly resulted from the above-mentioned items and (1) an increase in income tax recovery of $1,824 in the fourth quarter of 2022 due to the recognition of certain deferred tax assets as well as (2) a higher net gain on the revaluation of financial assets measured at fair value through profit or loss of $8,824 in the fourth quarter of 2022 versus a net gain of $2,300 in the prior year period mainly due to unrealized gains on revaluation of the strategic fund investments resulting from positive mark-to-market adjustments as a result of the increase in the share prices of one of the publicly-traded equities held by one of the funds, (3) foreign exchange loss of $1,633 versus a loss of $3,485 in the prior year period due to appreciation of the CAD versus the US dollar, and (4) a other expense for the quarter ended December 31, 2022 increase by $2,285 compared to the same period in prior year mainly due to the increase in a provision related to certain import tax claims.
For the year ended December 31, 2022, net loss was $29,892 compared to net income of $15,675 in prior year. The variance mainly resulted from the above-mentioned items and (1) an income tax recovery of $17,125 in 2022 due to the recognition of certain deferred tax assets due to timing differences related to our financial assets, impairment of certain non-current assets and certain intercompany transactions, compared to a prior year income tax recovery of $8,985, (2) a lower net loss on the revaluation of financial assets measured at fair value through profit or loss of $20,677 in 2022 versus a net gain of $18,944 in prior year mainly due to unrealized losses on revaluation of the strategic fund investments as a result of the decline in the share prices of the publicly-traded equities held by our strategic fund investments due to general market conditions, as well as (3) foreign exchange gain of $7,442 versus a loss of $3,737 in the prior year period due to appreciation of the US dollar compared to CAD in 2022, and (4) gain of $6,030 as a result of execution of settlement agreement and general release with the former shareholders of GBT, partially offset by expense due to the change in an accounting provision for a potential liability.
Cash, cash equivalents and marketable securities: As at December 31, 2022, Knight had $172,674 in cash, cash equivalents and marketable securities, including $18,961 [USD 14,000] pledged as restricted cash collateral under the IFC Loan. The increase of $23,172 or 15% as compared to December 31, 2022 primarily relates to cash generated through operating activities and funds received under the IFC Loan offset by cash outflows from shares purchased through the NCIB, the in-licensing of AKYNZEO® and ALOXI® from Helsinn as well as fostamatinib from Rigel, repayments on bank loans and foreign exchange gain on cash and cash equivalents.
Financial assets: As at December 31, 2022, financial assets were at $176,563, a decrease of $15,880 or 8%, as compared to the prior year, mainly due to a negative mark-to-market adjustments of $23,325 driven mostly by the decline in the share prices of the publicly-traded equities held by our strategic fund investments due to general market conditions, fund distributions of $6,478, decrease in equity investments and derivatives of $1,918 mainly due to disposal of Medimetriks offset by capital calls of $6,307, loans issued of $2,723 and foreign exchange gains of $6,245.
Bank Loans: As at December 31, 2022, bank loans were at $70,072, an increase of $34,145 or 95% as compared to the prior period, mainly due to the IFC loan offset by loan repayments.
Product Updates
Commercial Execution
In the first quarter of 2022, Knight launched three products in Colombia in Oncology/Hematology namely Lenvima® for differentiated thyroid cancer and unresectable hepatocellular carcinoma, Halaven® for metastatic breast cancer and soft tissue sarcoma and Rembre®, a branded generic product, for chronic myeloid leukemia.
As at March 22, 2023, the marketing authorizations of Exelon® for Brazil, Colombia, Argentina, Mexico, Chile, Peru, Ecuador and Canada were transferred to Knight. In addition, Knight has assumed the commercial activities of Exelon® in Colombia in Q2-22, Brazil, Argentina & Chile in Q3-22 and Mexico, Peru, Ecuador & Canada in Q4-22.
On May 12, 2022, 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. Knight has assumed commercial activities and re-launched AKYNZEO® in Brazil and Argentina in July 2022 and in Canada in Q4-22.
On July 1, 2022, Knight has entered into a transition and termination agreement with Gilead for a portfolio of HIV and HCV products (“Gilead Amendment”). The portfolio is currently distributed by Knight in one or more of the following countries: Colombia, Peru, Ecuador, Bolivia and Paraguay. As part of the Gilead Amendment, Knight distributes the products under a mutually agreed amended commercial and financial terms, until the earlier of April 30, 2023 and the completion of the regulatory, logistical and commercial transition on a per country and product basis. The Gilead Amendment does not impact any products distributed by the Company on behalf of Gilead in Brazil.
Advancing our pipeline portfolio
Knight submitted tafasitamab (sold as Monjuvi® in the United States and Minjuvi® in Europe) in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) who are not eligible for autologous stem cell transplantation (ASCT) for regulatory approval to ANVISA in Brazil in October 2022, INVIMA in Colombia in December 2022 and ANMAT in Argentina in January 2023. Knight expects to submit tafasitamab in other key LATAM countries in the first half of 2023.
In December 2022, Knight obtained the regulatory approval for Palbocil® (palbociclib) in Argentina. Knight launched Palbocil® in Argentina in March 2023 and filed for regulatory approval for Bapocil® (palbociclib) in Colombia and Chile in Q4-2022. Palbocil® is indicated for the treatment of patients with hormone receptor (HR)positive, human epidermal growth factor receptor 2 (HER2)-negative locally advanced or metastatic breast cancer in combination with an aromatase inhibitor as initial endocrine-based therapy in post-menopausal women or fulvestrant in patients with disease progression after prior endocrine therapy.
In addition, during the fourth quarter of 2022, Knight also submitted a branded generic of for regulatory approval in Chile and Colombia. Furthermore, the Company has in-licensed three branded generic products for our key markets in Latin America.
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 year ended December 31, 2022, the Company purchased 5,649,189 (2021: 12,321,864) common shares at an average price of $5.34 (2021: $5.23) for aggregate cash consideration of $30,069 (2021: $64,415). Subsequent to December 31, 2022, the Company purchased an additional 1,279,900 common shares at an average purchase price of $5.14 for an aggregate cash consideration of $6,577.
Financial Outlook
Knight provides guidance on revenues1 on a non-GAAP basis. This is due to both the difficulty in predicting Argentinian inflation rates and its IAS 29 impact.
For fiscal 2023, Knight expects to report $280 to $300 million in revenue and adjusted EBITDA, as a percentage of revenues, between 13% to 15% of revenue. 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 of March 22, 2023
- discontinuation of certain distribution 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 significant restrictions or economic shut down due to the COVID-19 pandemic
- foreign currency exchange rates 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.
“Our team has been successfully executing on our pan-American ex US strategy and has built a profitable business with a unique platform and a strong foundation from where to continue growing over the long term. We ended 2022 by delivering record revenues and adjusted EBITDA as a result of growing the current portfolio as well as adding new products that leverage our existing infrastructure. Looking ahead, while we will face headwinds with the entrance of new competitors on certain of our banded generic products as well as incur investments related to promoted products, Knight is expected to continue to generate strong cash flows from operations and with over $150,000 of cash and $175,000 of financial assets, we remain well positioned to execute on our mission to acquire, in-license, develop and commercialize pharmaceutical products in Latin America and Canada.” said Jonathan Ross Goodman, Executive Chairman of Knight Therapeutics Inc.
__________________________
1 Revenues excluding the impact of IAS 29 is 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 fourth quarter and year-end results today at 8:30 am ET. Knight cordially invites all interested parties to participate in this call.
Date: Thursday, March 23, 2023
Time: 8:30 a.m. ET
Telephone: Toll Free: 1-888-256-1007 or International 1-647-484-0475
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 as a result 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 |
Financial Results
Impact of Hyperinflation
The Company applies IAS 29, Financial Reporting in Hyperinflation Economies, as the Company’s Argentine subsidiaries use 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. After applying for the effects of translation, the statement of income is converted using the closing foreign exchange rate of the month. The Company restated the revenues and operating expenses of each of the following months in the year ended December 31 using the following general price indexes:
[Unaudited]
| January | February | March | April | May | June | July | August | September | October | November | December | |
| 2022 | 1.88 | 1.79 | 1.68 | 1.58 | 1.51 | 1.43 | 1.33 | 1.25 | 1.17 | 1.10 | 1.05 | 1.00 |
| 2021 | 1.45 | 1.40 | 1.34 | 1.28 | 1.24 | 1.20 | 1.17 | 1.14 | 1.10 | 1.06 | 1.04 | 1.00 |
If the Company did not apply IAS 29, the effect on the Company’s operating (loss) income would be as follows:
[Unaudited]
| Q4-22 | 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 | 81,655 | 83,806 | (2,151 | ) | 3 | % | 293,563 | 291,770 | 1,793 | 1 | % | |||||||||
| Cost of goods sold | 44,767 | 41,875 | (2,892 | ) | 7 | % | 155,502 | 141,411 | (14,091 | ) | 10 | % | ||||||||
| Gross margin | 36,888 | 41,931 | (5,043 | ) | 12 | % | 138,061 | 150,359 | (12,298 | ) | 8 | % | ||||||||
| Gross margin (%) | 45 | % | 50 | % | 47 | % | 52 | % | ||||||||||||
| Expenses | ||||||||||||||||||||
| Selling and marketing | 14,402 | 15,073 | 671 | 4 | % | 48,474 | 48,083 | (391 | ) | 1 | % | |||||||||
| General and administrative | 10,336 | 10,083 | (253 | ) | 3 | % | 40,150 | 37,451 | (2,699 | ) | 7 | % | ||||||||
| Research and development | 4,140 | 4,043 | (97 | ) | 2 | % | 14,755 | 13,733 | (1,022 | ) | 7 | % | ||||||||
| Amortization of intangible assets | 17,156 | 16,724 | (432 | ) | 3 | % | 51,742 | 49,561 | (2,181 | ) | 4 | % | ||||||||
| Impairment of non-current assets | 21,904 | 250 | (21,654 | ) | n/a4 | 23,984 | 2,330 | (21,654 | ) | n/a4 | ||||||||||
| Operating loss | (31,050 | ) | (4,242 | ) | (26,808 | ) | n/a4 | (41,044 | ) | (799 | ) | (40,245 | ) | n/a4 | ||||||
1 Financial results excluding the impact of hyperinflation is a non-GAAP measure. Refer to section “Non-GAAP measures” for additional details.
2 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.
3 Percentage change is presented in absolute values.
4 Percentage change not relevant.
[Unaudited]
| Q4-21 | YTD-21 | |||||||||||||||||
| Reported under IFRS | Excluding impact of IAS 291 | Variance | Reported under IFRS | Excluding impact of IAS 291 | Variance | |||||||||||||
| $2 | %3 | $2 | %3 | |||||||||||||||
| Revenues | 58,273 | 56,358 | 1,915 | 3 | % | 243,478 | 239,238 | 4,240 | 2 | % | ||||||||
| Cost of goods sold | 30,078 | 27,724 | (2,354 | ) | 8 | % | 128,066 | 120,409 | (7,657 | ) | 6 | % | ||||||
| Gross margin | 28,195 | 28,634 | (439 | ) | 2 | % | 115,412 | 118,829 | (3,417 | ) | 3 | % | ||||||
| Gross margin (%) | 48 | % | 51 | % | 47 | % | 50 | % | ||||||||||
| Expenses | ||||||||||||||||||
| Selling and marketing | 12,291 | 11,911 | (380 | ) | 4 | % | 39,078 | 38,256 | (822 | ) | 2 | % | ||||||
| General and administrative | 10,002 | 9,795 | (207 | ) | 2 | % | 35,298 | 33,730 | (1,568 | ) | 5 | % | ||||||
| Research and development | 3,496 | 3,087 | (409 | ) | 13 | % | 12,692 | 12,080 | (612 | ) | 5 | % | ||||||
| Amortization of intangible assets | 17,040 | 16,355 | (685 | ) | 4 | % | 41,176 | 38,824 | (2,352 | ) | 6 | % | ||||||
| Operating loss | (14,634 | ) | (12,514 | ) | (2,120 | ) | 17 | % | (12,832 | ) | (4,061 | ) | (8,771 | ) | 216 | % | ||
1 Financial results excluding the impact of hyperinflation is a non-GAAP measure. Refer to section “Non-GAAP measures” for additional details.
2 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.
3 Percentage change is presented in absolute values.
Impact of LATAM Foreign Exchange volatility
The Company records its transactions and balances in the respective functional currencies of its subsidiaries. Generally, for the LATAM subsidiaries, the functional currency is the local currency in the country where the entity operates. In order to convert a foreign-denominated transaction to the functional currency, the exchange rate prevailing at the date of the transaction is used. Furthermore, upon consolidation, for all subsidiaries with a functional currency other than CAD, the respective statements of income are translated using the average exchange rates for the period. The table below summarizes the average foreign exchange rates used for the conversion of selected LATAM currencies:
[Unaudited]
| Rates | Q4-22 | Q3-22 | Q2-22 | Q1-22 | Q4-21 | Q3-21 | Q2-21 | Q1-21 |
| BRL | 3.87 | 4.02 | 3.85 | 4.12 | 4.44 | 4.15 | 4.30 | 4.32 |
| ARS | 118.9 | 103.6 | 92.3 | 84.1 | 79.7 | 77.2 | 76.46 | 69.9 |
| COP | 3,550 | 3,363 | 3,074 | 3,093 | 3,080 | 3,058 | 3,012 | 2,812 |
| CLP | 674 | 712 | 660 | 639 | 656 | 614 | 583 | 572 |
The below table summarizes the variances quarter over quarter for selected LATAM currencies:
| Variance (%)1 | Q4-22 | Q3-22 | Q2-22 | Q1-22 | Q4-21 | Q3-21 | Q2-21 | Q1-21 | ||||||||
| BRL | 4 | % | -4 | % | 7 | % | 7 | % | -7 | % | 3 | % | 0 | % | -4 | % |
| ARS | -15 | % | -12 | % | -10 | % | -6 | % | -3 | % | -1 | % | -9 | % | -14 | % |
| COP | -6 | % | -9 | % | 1 | % | 0 | % | -1 | % | -2 | % | -7 | % | 0 | % |
| CLP | 5 | % | -8 | % | -3 | % | 3 | % | -7 | % | -5 | % | -2 | % | 2 | % |
1 Negative percentage represents a depreciation of the currency while a positive variance represents an appreciation of the currency.
Impact
Exchange rate fluctuations of LATAM currencies impact the Company’s results in two ways:
- Transactional impact: certain product purchases and operating expenses are denominated in foreign currencies (mainly USD, EURO and CHF); and,
- Translational impact: translation of local LATAM functional currency operating results to reporting currency in CAD.
Constant Currency
Financial results at constant currency1 allow results to be viewed without the impact of fluctuations in foreign currency exchange rates thereby facilitating the comparison of results period over period. The presentation of financial results at 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.
Financial results at constant currency are obtained by translating the prior period 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 results at the average exchange rate in effect for each of the periods.
______________________________
1 Financial results at constant currency are non-GAAP measure, refer to section “Non-GAAP measures” for additional details.
[Unaudited]
| Q4-22 | Q4-21 | Variance | YTD-22 | YTD-21 | Variance | ||||||||||||||
| Excluding impact of IAS 291 | |||||||||||||||||||
| Constant Currency2 | $3 | %4 | Constant Currency2 | $3 | %4 | ||||||||||||||
| Revenues | 83,806 | 58,370 | 25,436 | 44 | % | 291,770 | 243,731 | 48,039 | 20 | % | |||||||||
| Cost of goods sold | 41,875 | 28,678 | (13,197 | ) | 46 | % | 141,411 | 123,037 | (18,374 | ) | 15 | % | |||||||
| Gross margin | 41,931 | 29,692 | 12,239 | 41 | % | 150,359 | 120,694 | 29,665 | 25 | % | |||||||||
| Gross margin (%) | 50 | % | 51 | % | 52 | % | 50 | % | |||||||||||
| Expenses | |||||||||||||||||||
| Selling and marketing | 15,073 | 12,223 | (2,850 | ) | 23 | % | 48,083 | 38,715 | (9,368 | ) | 24 | % | |||||||
| General and administrative | 10,083 | 10,289 | 206 | 2 | % | 37,451 | 34,458 | (2,993 | ) | 9 | % | ||||||||
| Research and development | 4,043 | 3,193 | (850 | ) | 27 | % | 13,733 | 12,264 | (1,469 | ) | 12 | % | |||||||
| Amortization of intangible assets | 16,724 | 16,804 | 80 | 0 | % | 49,561 | 39,428 | (10,133 | ) | 26 | % | ||||||||
| Impairment of non-current assets | 250 | — | (250 | ) | 100 | % | 2,330 | — | (2,330 | ) | 100 | % | |||||||
| Operating (loss) income | (4,242 | ) | (12,817 | ) | 8,575 | 67 | % | (799 | ) | (4,171 | ) | 3,372 | 81 | % | |||||
| EBITDA5 | 13,330 | 4,258 | 9,072 | 213 | % | 53,541 | 36,376 | 17,165 | 47 | % | |||||||||
| Adjusted EBITDA5 | 13,821 | 5,884 | 7,937 | 135 | % | 54,032 | 38,551 | 15,481 | 40 | % | |||||||||
1 Financial results excluding the impact of hyperinflation is a non-GAAP measure, refer to section “Non-GAAP measures” for additional details.
2 Financial results at constant currency are non-GAAP measure, refer to section “Non-GAAP measures” for additional details.
3 A positive variance represents a positive impact to net income and a negative variance represents a negative impact to net income.
4 Percentage change is presented in absolute values.
5 Financial results at constant currency, EBITDA and adjusted EBITDA are non-GAAP measures, refer to section “Non-GAAP measures” and “Reconciliation to adjusted EBITDA” for additional details.
The financial results under IFRS reconcile to the financial results at constant currency as follows:
[Unaudited]
| Q4-21 | YTD-21 | |||||||||||||||
| Reported under IFRS | IAS 29 Adjustment | Constant Currency Adjustment | Constant Currency1 | Reported under IFRS | IAS 29 Adjustment | Constant Currency Adjustment | Constant Currency1 | |||||||||
| Revenues | 58,273 | (1,915 | ) | 2,012 | 58,370 | 243,478 | (4,240 | ) | 4,493 | 243,731 | ||||||
| Cost of goods sold | 30,078 | (2,354 | ) | 954 | 28,678 | 128,066 | (7,657 | ) | 2,628 | 123,037 | ||||||
| Gross margin | 28,195 | 439 | 1,058 | 29,692 | 115,412 | 3,417 | 1,865 | 120,694 | ||||||||
| Expenses | ||||||||||||||||
| Selling and marketing | 12,291 | (380 | ) | 312 | 12,223 | 39,078 | (822 | ) | 459 | 38,715 | ||||||
| General and administrative | 10,002 | (207 | ) | 494 | 10,289 | 35,298 | (1,568 | ) | 728 | 34,458 | ||||||
| Research and development | 3,496 | (409 | ) | 106 | 3,193 | 12,692 | (612 | ) | 184 | 12,264 | ||||||
| Amortization of intangible assets | 17,040 | (685 | ) | 449 | 16,804 | 41,176 | (2,352 | ) | 604 | 39,428 | ||||||
| Operating loss | (14,634 | ) | 2,120 | (303 | ) | (12,817 | ) | (12,832 | ) | 8,771 | (110 | ) | (4,171 | ) | ||
1 Financial results at constant currency are non-GAAP measure, refer to section “Non-GAAP measures” for additional details.
Consolidated Statement of (Loss) Income
[In thousands of Canadian dollars]
[Unaudited]
| Change | Change | |||||||||||||||||||
| Q4-22 | Q4-21 | $1 | %2 | YTD-22 | YTD-21 | $1 | %2 | |||||||||||||
| Revenues | 81,655 | 58,273 | 23,382 | 40 | % | 293,563 | 243,478 | 50,085 | 21 | % | ||||||||||
| Cost of goods sold | 44,767 | 30,078 | (14,689 | ) | 49 | % | 155,502 | 128,066 | (27,436 | ) | 21 | % | ||||||||
| Gross margin | 36,888 | 28,195 | 8,693 | 31 | % | 138,061 | 115,412 | 22,649 | 20 | % | ||||||||||
| Gross margin (%) | 45 | % | 48 | % | 47 | % | 47 | % | ||||||||||||
| Expenses | ||||||||||||||||||||
| Selling and marketing | 14,402 | 12,291 | (2,111 | ) | 17 | % | 48,474 | 39,078 | (9,396 | ) | 24 | % | ||||||||
| General and administrative | 10,336 | 10,002 | (334 | ) | 3 | % | 40,150 | 35,298 | (4,852 | ) | 14 | % | ||||||||
| Research and development | 4,140 | 3,496 | (644 | ) | 18 | % | 14,755 | 12,692 | (2,063 | ) | 16 | % | ||||||||
| Amortization of intangible assets | 17,156 | 17,040 | (116 | ) | 1 | % | 51,742 | 41,176 | (10,566 | ) | 26 | % | ||||||||
| Impairment of non-current assets | 21,904 | — | (21,904 | ) | 100 | % | 23,984 | — | (23,984 | ) | 100 | % | ||||||||
| Operating (loss) income | (31,050 | ) | (14,634 | ) | (16,416 | ) | 112 | % | (41,044 | ) | (12,832 | ) | (28,212 | ) | 220 | % | ||||
| Interest income on financial instruments measured at amortized cost | (1,922 | ) | (725 | ) | 1,197 | 165 | % | (4,072 | ) | (2,446 | ) | 1,626 | 66 | % | ||||||
| Other interest income | (2,341 | ) | (1,471 | ) | 870 | 59 | % | (6,560 | ) | (4,936 | ) | 1,624 | 33 | % | ||||||
| Interest expense | 2,293 | 1,331 | (962 | ) | 72 | % | 6,600 | 3,618 | (2,982 | ) | 82 | % | ||||||||
| Other (income) expense | 1,964 | (321 | ) | (2,285 | ) | 712 | % | (4,025 | ) | (128 | ) | 3,897 | 3045 | % | ||||||
| Net loss (gain) on financial assets measured at fair value through profit or loss | (8,824 | ) | (2,300 | ) | 6,524 | 284 | % | 20,677 | (18,944 | ) | (39,621 | ) | 209 | % | ||||||
| Foreign exchange (gain) loss | 1,663 | 3,485 | 1,822 | 52 | % | (7,442 | ) | 3,737 | 11,179 | 299 | % | |||||||||
| Gain on hyperinflation | (748 | ) | (209 | ) | 539 | 258 | % | (2,262 | ) | (423 | ) | 1,839 | 435 | % | ||||||
| Income (loss) before income taxes | (23,135 | ) | (14,424 | ) | (8,711 | ) | 60 | % | (43,960 | ) | 6,690 | 50,650 | 757 | % | ||||||
| Income tax | ||||||||||||||||||||
| Current | 882 | (2,642 | ) | (3,524 | ) | 133 | % | 3,057 | (1,349 | ) | (4,406 | ) | 327 | % | ||||||
| Deferred | (8,829 | ) | (3,481 | ) | 5,348 | 154 | % | (17,125 | ) | (7,636 | ) | 9,489 | 124 | % | ||||||
| Income tax recovery | (7,947 | ) | (6,123 | ) | 1,824 | 30 | % | (14,068 | ) | (8,985 | ) | 5,083 | 57 | % | ||||||
| Net (loss) income for the period | (15,188 | ) | (8,301 | ) | (6,887 | ) | 83 | % | (29,892 | ) | 15,675 | (45,567 | ) | 291 | % | |||||
| Basic and diluted net (loss) earnings per share | (0.13 | ) | (0.07 | ) | (0.07 | ) | 99 | % | (0.26 | ) | 0.13 | (0.39 | ) | 307 | % | |||||
| EBITDA3 | 13,330 | 4,101 | 9,229 | 225 | % | 53,541 | 35,865 | 17,676 | 49 | % | ||||||||||
| Adjusted EBITDA3 | 13,821 | 5,696 | 8,125 | 143 | % | 54,032 | 38,005 | 16,027 | 42 | % | ||||||||||
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 is a non-GAAP measure, refer to section “Non-GAAP measures” and “Reconciliation to adjusted EBITDA” for additional details.
| Revenues | Q4-22 vs Q4-21 | |||||||
| Q4-22 | Q4-21 | Q4-21 | Change | |||||
| Excluding impact of IAS 293 | Excluding impact of IAS 293 | Constant Currency4 | Excluding impact of IAS 293 | |||||
| Therapeutic Area | $ | $ | $ | $1 | %2 | |||
| Oncology/Hematology | 29,343 | 23,534 | 23,876 | 5,809 | 25 | % | ||
| Infectious Diseases | 32,744 | 20,211 | 21,393 | 12,533 | 62 | % | ||
| Other Specialty | 21,719 | 12,613 | 13,101 | 9,106 | 72 | % | ||
| Total | 83,806 | 56,358 | 58,370 | 27,448 | 49 | % | ||
| 1 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 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. 4 Revenues at constant currency is a non-GAAP measure, refer to section “Non-GAAP measures” for additional details | ||||||||
For the quarter ended December 31, 2022, excluding the impact of hyperinflation, revenues increased by $27,448 or 49% compared to the same period in prior year. The increase in revenues excluding the impact of hyperinflation is explained by the following:
Innovative Portfolio: The portfolio consists of the pharmaceutical products with innovative molecules and includes both in-licensed products such as Lenvima®, Cresemba®, Halaven®, Trelstar®, Akynzeo®, Ambisome® as well as products owned (or partially owned) by Knight such as Exelon® and Impavido®. The categories of the portfolio are as follows:
| ||||||||
| Q4-22 | Q4-21 | Change | ||||||
| Excluding impact of IAS 293 | Excluding impact of IAS 293 | Excluding impact of IAS 293 | ||||||
| Product portfolio | $ | $ | $1 | %2 | ||||
| Innovative – Promoted | 54,270 | 26,127 | 28,143 | 108 | % | |||
| Innovative – Mature | 13,399 | 9,199 | 4,200 | 46 | % | |||
| Innovative – Discontinued | 735 | 3,547 | (2,812 | ) | 79 | % | ||
| Total Innovative | 68,404 | 38,873 | 29,531 | 76 | % | |||
| BGx - New Launches | 2,999 | 2,730 | 269 | 10 | % | |||
| BGx – Mature | 11,661 | 12,814 | (1,153 | ) | 9 | % | ||
| BGx – Discontinued | 742 | 1,941 | (1,199 | ) | 62 | % | ||
| Total BGx | 15,402 | 17,485 | (2,083 | ) | 12 | % | ||
| Total | 83,806 | 56,358 | 27,448 | 49 | % | |||
| 1 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 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. 4 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 | ||||||||
| Change | |||||||
| Excluding impact of IAS 293 | |||||||
| Product portfolio | $1 | %2 | |||||
| Innovative – Promoted | 28,143 | 108 | % |
| |||
| Innovative - Mature | 4,200 | 46 | % |
| |||
| Innovative - Discontinued | (2,812 | ) | 79 | % |
| ||
| Total Innovative | 29,531 | 76 | % | ||||
| BGx - New Launches | 269 | 10 | % |
| |||
| BGx - Mature | (1,153 | ) | 9 | % |
| ||
| BGx - Discontinued | (1,199 | ) | 62 | % |
| ||
| Total BGx | (2,083 | ) | 12 | % | |||
| Total | 27,448 | 49 | % | ||||
| 1 Percentage change is presented in absolute values 2 Revenues excluding the impact of IAS 29 is a non-GAAP measure, refer to section “Non-GAAP measures” for additional details. | |||||||
| YTD-22 vs YTD-21 | ||||||||
| YTD-22 | YTD-21 | YTD-21 | Change | |||||
| Excluding impact of IAS 293 | Excluding impact of IAS 293 | Constant Currency4 | Excluding impact of IAS 293 | |||||
| Therapeutic Area | $ | $ | $ | $1 | %2 | |||
| Oncology/Hematology | 105,464 | 89,079 | 89,505 | 16,385 | 18 | % | ||
| Infectious Diseases | 116,530 | 101,650 | 106,640 | 14,880 | 15 | % | ||
| Other Specialty | 69,776 | 48,509 | 47,586 | 21,267 | 44 | % | ||
| Total | 291,770 | 239,238 | 243,731 | 52,532 | 22 | % | ||
| 1 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 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.4 Revenues at constant currency is a non-GAAP measure, refer to section “Non-GAAP measures” for additional details 4 Revenues at constant currency is a non-GAAP measure, refer to section “Non-GAAP measures” for additional details For the twelve-month period ended December 31, 2022, excluding the impact of hyperinflation, revenues increased by $52,532 or 22% compared to the same period in prior year. The growth in revenues excluding the impact of hyperinflation is explained by the following:
| ||||||||
| During the year ended December 31, 2022, excluding the impact of IAS 29, the Company generated revenues of $228,003 or 78% of total revenues from its innovative portfolio and $63,767 or 22% of total revenues from its BGx portfolio. | ||||||||
| YTD-22 | YTD-21 | Change | ||||||
| Excluding impact of IAS 293 | Excluding impact of IAS 293 | Excluding impact of IAS 293 | ||||||
| Product portfolio | $ | $ | $1 | %2 | ||||
| Innovative - Promoted | 170,391 | 120,127 | 50,264 | 42 | % | |||
| Innovative - Mature | 49,209 | 41,998 | 7,211 | 17 | % | |||
| Innovative - Discontinued | 8,403 | 13,389 | (4,986 | ) | 37 | % | ||
| Total Innovative | 228,003 | 175,514 | 52,489 | 30 | % | |||
| BGx - New Launches | 12,091 | 7,115 | 4,976 | 70 | % | |||
| BGx - Mature | 47,744 | 49,772 | (2,028 | ) | 4 | % | ||
| BGx - Discontinued | 3,932 | 6,837 | (2,905 | ) | 42 | % | ||
| Total BGx | 63,767 | 63,724 | 43 | 0 | % | |||
| Total | 291,770 | 239,238 | 52,532 | 22 | % | |||
| 1 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 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 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. | ||||||||
| Change | |||||||
| Excluding impact of IAS 293 | |||||||
| Product portfolio | $1 | %2 | |||||
| Innovative - Promoted | 50,264 | 42 | % |
| |||
| Innovative - Mature | 7,211 | 17 | % |
| |||
| Innovative - Discontinued | (4,986 | ) | 37 | % |
| ||
| Total Innovative | 52,489 | 30 | % | ||||
| BGx - New Launches | 4,976 | 70 | % |
| |||
| BGx - Mature | (2,028 | ) | 4 | % |
| ||
| BGx - Discontinued | (2,905 | ) | 42 | % |
| ||
| Total BGx | 43 | 0 | % | ||||
| Total | 52,532 | 22 | % | ||||
1 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 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 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. | |||||||
| Gross margin | Q4-22 vs Q4-21
|
| Selling and marketing | Q4-22 vs Q4-21
|
| General and administrative | Q4-22 vs Q4-21
|
| Research and development expenses | Q4-22 vs Q4-21
|
| Amortization of intangible assets | YTD-22 vs YTD-21
|
| Impairment of non-current assets | YTD-22 vs YTD-21 and Q4-22 vs Q4-21
|
| Interest income | YTD-22 vs YTD-21 and Q4-22 vs Q4-21
|
| Interest Expense | Q4-22 vs Q4-21 and YTD-22 vs YTD-21
|
| Other income (expense) | Q4-22 vs Q4-21
|
| Net gain or loss on financial assets measured at fair value through profit or loss | Q4-22 vs Q4-21
|
| Foreign exchange gain or loss | Q4-22 vs Q4-21
| |
| Gain or loss on hyperinflation |
| |
| Income tax expense |
| |
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 and Financial results at constant currency: Revenues/financial results at constant currency are obtained by translating the prior period revenues/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/results at the average exchange rate in effect for each of the periods.
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 long-lived 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.
Reconciliation to adjusted EBITDA
For the three-month period and year ended December 31, 2022, the Company calculated EBITDA and adjusted EBITDA as follows:
| [Unaudited] | Change | Change | |||||||||||||
| Q4-22 | Q4-21 | $1 | %2 | YTD-22 | YTD-21 | $1 | %2 | ||||||||
| Operating loss | (31,050 | ) | (14,634 | (16,416 | ) | 112 | % | (41,044 | ) | (12,832 | ) | (28,212 | ) | 220 | % |
| Adjustments to operating loss: | |||||||||||||||
| Amortization of intangible assets | 17,156 | 17,040 | 116 | 1 | % | 51,742 | 41,176 | 10,566 | 26 | % | |||||
| Impairment of non-current assets | 21,904 | — | 21,904 | 100 | % | 23,984 | — | 23,984 | 100 | % | |||||
| Depreciation of property, plant and equipment and ROU assets | 3,037 | 1,961 | 1,076 | 55 | % | 10,879 | 6,739 | 4,140 | 61 | % | |||||
| Lease costs (IFRS 16 adjustment) | (836 | ) | (874 | 38 | 4 | % | (2,750 | ) | (3,016 | ) | 266 | 9 | % | ||
| Impact of IAS 29 | 3,119 | 608 | 2,511 | 413 | % | 10,730 | 3,798 | 6,932 | 183 | % | |||||
| EBITDA 3 | 13,330 | 4,101 | 9,229 | 225 | % | 53,541 | 35,865 | 17,676 | 49 | % | |||||
| Acquisition and transaction costs | — | — | — | 0 | % | — | 432 | (432 | ) | 100 | % | ||||
| Other non-recurring expenses | 491 | 1,595 | (1,104 | ) | 69 | % | 491 | 1,708 | (1,217 | ) | 71 | % | |||
| Adjusted EBITDA 3 | 13,821 | 5,696 | 8,125 | 143 | % | 54,032 | 38,005 | 16,027 | 42 | % | |||||
1 A positive variance represents a positive impact to EBITDA and adjusted EBITDA and a negative variance represents a negative impact to EBITDA and adjusted EBITDA
2 Percentage change is presented in absolute values
3 EBITDA and adjusted EBITDA are non-GAAP measures, refer to section “Non-GAAP measures” for additional details
Explanation of adjustments
| Acquisition costs | Acquisition and transaction costs relate to costs incurred on legal, consulting and advisory fees for the acquisition of GBT and the acquisition of products. During the year ended December 31, 2021 the Company incurred expenses of $432 related to acquisition of Exelon® (Q4-21: Nil). |
| Other non-recurring expenses | Other non-recurring expenses relate to expenses incurred by the Company that are not due to, and are not expected to occur in, the ordinary course of business. For the year ended December 31, 2022, the Company incurred non-recurring costs of $491 (Q4-22: $491) related to restructuring activities including severance to certain employees as part of restructuring and integration of GBT. For the year ended December 31, 2021, the Company incurred non-recurring costs of $1,708 (Q4-21: $1,595) related to restructuring activities including severance to certain employees as part of restructuring and integration of GBT. |
Adjusted EBITDA Q4-22 vs Q4-21
For the three-month period ended December 31, 2022 adjusted EBITDA increased by $8,125 or 143%. The growth in adjusted EBITDA is driven by an increase in gross margin of $8,693 offset by an increase in operating expenses. Refer to above explanations for further details.
Adjusted EBITDA YTD-22 vs YTD-21
For the year ended December 31, 2022 adjusted EBITDA increased by $16,027 or 42%. The growth in adjusted EBITDA is driven by an increase in gross margin of $22,649 offset by an increase in operating expenses. Refer to above explanations for further details.
Financial Condition
Impact of LATAM Foreign Exchange volatility
The following table represents the quarter end closing rates used by Knight to convert the assets and liabilities on the balance sheet at the end of each reporting period.
| Rates | Q4-22 | Q3-22 | Q2-22 | Q1-22 | Q4-21 |
| BRL | 3.90 | 3.94 | 4.05 | 3.80 | 4.40 |
| ARS | 130.53 | 107.12 | 97.07 | 88.72 | 80.88 |
| COP | 3,584 | 3,322 | 3,205 | 3,012 | 3,195 |
| CLP | 629 | 703 | 718 | 631 | 671 |
The below table summarizes the variances quarter over quarter for selected LATAM currencies:
| Variance (%)1 | Q4-22 | Q3-22 | Q2-22 | Q1-22 | ||||
| BRL | 1 | % | 3 | % | -7 | % | 14 | % |
| ARS | -22 | % | -10 | % | -9 | % | -10 | % |
| COP | -8 | % | -4 | % | -6 | % | 6 | % |
| CLP | 10 | % | 2 | % | -14 | % | 6 | % |
1Negative percentage represents a depreciation of the currency while a positive variance represents an appreciation of the currency
Consolidated Balance Sheets
[In thousands of Canadian dollars]
[Unaudited]
| Change | ||||||
| 12-31-22 | 12-31-21 | $ | %1 | |||
| ASSETS | ||||||
| Current | ||||||
| Cash and cash equivalents | 71,679 | 85,963 | (14,284 | ) | 17 | % |
| Marketable securities | 85,826 | 63,539 | 22,287 | 35 | % | |
| Trade receivables | 94,890 | 55,388 | 39,502 | 71 | % | |
| Other receivables | 12,930 | 5,056 | 7,874 | 156 | % | |
| Inventories | 92,489 | 72,397 | 20,092 | 28 | % | |
| Prepaids and deposits | 1,704 | 2,165 | (461 | ) | 21 | % |
| Other current financial assets | 33,716 | 13,491 | 20,225 | 150 | % | |
| Income taxes receivable | 2,385 | 6,970 | (4,585 | ) | 66 | % |
| Total current assets | 395,619 | 304,969 | 90,650 | 30 | % | |
| Marketable securities | 15,169 | — | 15,169 | 0 | % | |
| Prepaids and deposits | 4,355 | 3,046 | 1,309 | 43 | % | |
| Right-of-use assets | 5,827 | 4,671 | 1,156 | 25 | % | |
| Property, plant and equipment | 16,806 | 25,265 | (8,459 | ) | 33 | % |
| Investment properties | — | 1,457 | (1,457 | ) | 100 | % |
| Intangible assets | 338,780 | 350,299 | (11,519 | ) | 3 | % |
| Goodwill | 82,274 | 75,403 | 6,871 | 9 | % | |
| Other financial assets | 142,847 | 178,952 | (36,105 | ) | 20 | % |
| Deferred income tax assets | 9,310 | 2,048 | 7,262 | 355 | % | |
| Other long-term receivables | 43,849 | 43,431 | 418 | 1 | % | |
| 659,217 | 684,572 | (25,355 | ) | 4 | % | |
| Assets held for sale | — | 2,350 | (2,350 | ) | 100 | % |
| Total assets | 1,054,836 | 991,891 | 62,945 | 6 | % | |
s1 Percentage change is presented in absolute values
| Change | ||||||||
| 12-31-22 | 12-31-21 | $ | %1 | |||||
| LIABILITIES AND EQUITY | ||||||||
| Current | ||||||||
| Accounts payable and accrued liabilities | 106,061 | 65,309 | 40,752 | 62 | % | |||
| Lease liabilities | 2,578 | 1,614 | 964 | 60 | % | |||
| Other liabilities | 5,793 | 1,989 | 3,804 | 191 | % | |||
| Bank loans | 17,674 | 26,662 | (8,988 | ) | 34 | % | ||
| Income taxes payable | 2,274 | 7,073 | (4,799 | ) | 68 | % | ||
| Other balances payable | 6,941 | 2,655 | 4,286 | 161 | % | |||
| Total current liabilities | 141,321 | 105,302 | 36,019 | 34 | % | |||
| Accounts payable and accrued liabilities | 2,669 | 281 | 2,388 | 850 | % | |||
| Lease liabilities | 5,050 | 3,417 | 1,633 | 48 | % | |||
| Bank loans | 52,398 | 9,265 | 43,133 | 466 | % | |||
| Other balances payable | 23,176 | 19,235 | 3,941 | 20 | % | |||
| Deferred income tax liabilities | 4,365 | 12,373 | (8,008 | ) | 65 | % | ||
| Total liabilities | 228,979 | 149,873 | 79,106 | 53 | % | |||
| Shareholders’ Equity | ||||||||
| Share capital | 599,055 | 628,854 | (29,799 | ) | 5 | % | ||
| Warrants | 117 | 117 | — | 0 | % | |||
| Contributed surplus | 23,664 | 21,776 | 1,888 | 9 | % | |||
| Accumulated other comprehensive income (loss) | 41,266 | (376 | ) | 41,642 | 11075 | % | ||
| Retained earnings | 161,755 | 191,647 | (29,892 | ) | 16 | % | ||
| Total shareholders’ equity | 825,857 | 842,018 | (16,161 | ) | 2 | % | ||
| Total liabilities and shareholders’ equity | 1,054,836 | 991,891 | 62,945 | 6 | % | |||
[Unaudited]
1 Percentage change is presented in absolute values
12-31-22 vs 12-31-21 | |
| Cash and cash equivalents |
|
| Trade receivables |
|
| Other receivables (current) |
|
| Inventories |
|
| Other financial assets (current and long term) | Other financial assets decreased by $15,880, or 85%, explained mainly by the following: Loans and other receivable: increase of $5,023 mainly attributable to net loans issued of $2,723 and foreign exchange gains of $1,734. Equity investments and Derivatives: decrease of $1,918 or 24% driven mainly by the disposal of Medimetriks equity investments during the period and the revaluation of equity investments and derivatives. Funds: decrease of $18,985 due to negative mark-to-market adjustments of $23,325 driven mostly by the decline in the share prices of the publicly-traded equities held by our strategic fund investments due to general market conditions, distributions received and receivable of $6,478, offset by capital calls of $6,307 and foreign exchange gains of $4,511. |
| Income tax receivable |
|
| Property, plant and equipment |
|
| Intangible assets |
|
| Goodwill |
|
| Deferred income tax asset | Increase is mainly explained by additional deferred tax assets recognized on tax losses generated in certain jurisdictions and certain temporary differences related to financial assets and change in temporary differences related to intercompany transactions. |
| 12-31-22 vs 12-31-21 | |
| Other receivables (long-term) |
|
| Accounts payable and accrued liabilities (current and long term) |
|
| Bank loans (current and long term) |
|
| Income tax payable |
|
| Other balances payable (current and long term) |
|
| Deferred income tax liability |
|
| Share capital |
|
| Contributed surplus |
|
Liquidity and Capital Resources
The Company’s Investment Policy governs the investment activities relating to cash resources. An Investment Committee composed of representatives from management and the Board of Directors monitors compliance with said policy. The Company invests in strategic investments in the form of equity funds, debt funds, equity or liquid investment securities with varying terms to maturity, selected with regard to the expected timing of investments and expenditures for continuing operations and prevailing interest rates.
The Company believes that its existing cash, cash equivalents and marketable securities as well as cash generated from operations are sufficient to finance its current operations, working capital requirements and future product and corporate acquisitions. The table below sets forth a summary of cash flow activity and should be read in conjunction with our consolidated statements of cash flows.
[Unaudited]
| Change | YTD | Change | ||||||||||||||
| Q4-22 | Q4-21 | $ | %1 | 2022 | 2021 | $ | %1 | |||||||||
| Net cash from operating activities | 4,752 | 4,681 | 71 | 2 | % | 40,481 | 44,618 | (4,137 | ) | 9 | % | |||||
| Net cash used in investing activities | (65,024 | ) | 9,469 | (74,493 | ) | 787 | % | (63,079 | ) | (105,279 | ) | 42,200 | 40 | % | ||
| Net cash from (used in) financing activities | 29,858 | (22,886 | ) | 52,744 | 230 | % | 1,762 | (78,310 | ) | 80,072 | 102 | % | ||||
| Increase in cash and cash equivalents during the period | (30,414 | ) | (8,736 | ) | (21,678 | ) | 248 | % | (20,836 | ) | (138,971 | ) | 118,135 | 85 | % | |
| Net foreign exchange difference | 271 | 2,209 | (1,938 | ) | 88 | % | 6,552 | (4,658 | ) | 11,210 | 241 | % | ||||
| Cash and cash equivalents beginning of the period | 101,822 | 92,490 | 9,332 | 10 | % | 85,963 | 229,592 | (143,629 | ) | 63 | % | |||||
| Cash and cash equivalents, end of the period | 71,679 | 85,963 | (14,284 | ) | 17 | % | 71,679 | 85,963 | (14,284 | ) | 17 | % | ||||
| Marketable securities2, end of the period | 100,995 | 63,539 | 37,456 | 59 | % | 100,995 | 63,539 | 37,456 | 59 | % | ||||||
| Cash and cash equivalents, and marketable securities2, end of the period | 172,674 | 149,502 | 23,172 | 15 | % | 172,674 | 149,502 | 23,172 | 15 | % | ||||||
| Cash and cash equivalents, net of bank loans | 1,607 | 50,036 | (48,429 | ) | 97 | % | 1,607 | 50,036 | (48,429 | ) | 97 | % | ||||
1 Percentage change is presented in absolute values.
2 Including marketable securities pledged as restricted cash collateral under the IFC loan.
| Q4-22 | YTD-22 | ||
| Net cash from operating activities | Primarily relates to cash generated through revenues and interest received, offset by operating expenses including salaries, research and development expenses, advertising and promotion costs, interest paid and other corporate expenses. Cash flows from operating activities exclude revenues and expenses not affecting cash, such as unrealized and realized gains or losses on financial assets, share based compensation expense, depreciation and amortization, unrealized foreign exchange gains or losses, hyperinflation gains, other income, deferred other income, and net changes in non-cash balances relating to operations. | ||
| For the three-month period ended December 31, 2022, cash inflow from operations was $4,752. The net loss for the quarter plus adjustments of non-cash items such as depreciation, amortization and impairment is $6,280 which is offset by an increase in working capital of $1,528. The increase in the working capital is mainly due to the transition of commercial activities to Knight related to Exelon® and Akynzeo®. The working capital levels are expected to normalize during the first half of 2023. Furthermore, the net cash from operating activities included an inflow of $2,287 related to net interest received mainly driven by the timing of maturity of marketable securities. | For the year ended December 31, 2022, cash inflow from operations was $40,481. The net loss for the year plus adjustments of non-cash items such as non-cash items such as depreciation, amortization and impairment is $50,470 which is offset by an increase in working capital of $9,989. The increase in the working capital is mainly due to the transition of commercial activities to Knight related to Exelon® and Akynzeo®. The working capital levels are expected to normalize during the first half of 2023. Furthermore, the net cash from operating activities included an inflow of $7,608 related to net interest received mainly driven by the timing of maturity of marketable securities as well as an inflow of $6,030 from the settlement with former shareholders of GBT. | ||
| Net cash from investing activities | For the three-month period ended December 31, 2022, cash flows were mainly driven by:
| For the year ended December 31, 2022, cash flows were mainly driven by:
| |
| Net cash from financing activities | Cash flows from financing activities were mainly due to the repurchase of common shares through the NCIB, principal repayments on bank loans, principal repayments on lease liabilities, proceeds from bank loans and proceeds from the participation of employees and directors in the Company’s share purchase plan. | ||
The Company had the following indebtedness as at the end of the following periods:
| As at December 31, 2022 | |||||||||
| [Unaudited] | |||||||||
| Currency of debt | Interest rate | Effective interest rate | Maturity | Current $ | Non-current $ | Total $ | |||
| Banks | |||||||||
| Itaú Unibanco Brasil | BRL | 1.65% + CDI | 13.36 | % | Dec 8, 2023 | 8,487 | — | 8,487 | |
| Bancolombia | COP | 2.28% + IBR | 8.07 | % | Oct 12, 2026 | 2,299 | 6,194 | 8,493 | |
| Banco ICBC Argentina1 | ARS | 77%2 | 77%2 | N/A | 344 | — | 344 | ||
| Banco Itaú Argentina1 | ARS | 76%3 | 76%3 | N/A | 1,270 | — | 1,270 | ||
| IFC | BRL | 1.6% + CDI | 15.83 | % | Oct 15, 2027 | 3,121 | 23,309 | 26,430 | |
| IFC | CLP | 7.71 | % | 7.86 | % | Oct 15, 2027 | 1,202 | 9,198 | 10,400 |
| IFC | COP | 1.6% + IBR | 13.29 | % | Oct 15, 2027 | 735 | 10,613 | 11,348 | |
| IFC | MXN | 1.6% + TIIE | 13.07 | % | Oct 15, 2027 | 216 | 3,084 | 3,300 | |
| Total Bank Loans | 17,764 | 52,398 | 70,072 | ||||||
1 Overdraft balances
2 Fixed rate renewed monthly
3 Fixed rate renewed daily
| As at December 31, 2021 | ||||||||
| Currency of debt | Interest rate | Effective interest rate | Maturity | Current $ | Non-current $ | Total $ | ||
| Banks | ||||||||
| Itaú Unibanco Brasil | BRL | 1.65% + CDI | 5.97 | % | Dec 8, 2023 | 15,028 | — | 15,028 |
| Itaú Unibanco Brasil | BRL | 2.20% + CDI | 11.35 | % | Dec 28, 2022 | 5,601 | — | 5,601 |
| Bancolombia | COP | 2.28% + IBR | 4.47 | % | Oct 12, 2026 | 2,448 | 9,265 | 11,713 |
| Banco ICBC Argentina1 | ARS | 42%2 | 42 | % | N/A | 694 | — | 694 |
| Banco Itaú Argentina1 | ARS | 40%3 | 40 | % | N/A | 2,891 | — | 2,891 |
| Total Bank Loans | 26,662 | 9,265 | 35,927 | |||||
1 Overdraft balances
2 Fixed rate renewed monthly
3 Fixed rate renewed daily
CONSOLIDATED STATEMENTS OF CASH FLOWS
[In thousands of Canadian dollars]
[Unaudited]
| Three months ended December 31, | Year ended December 31, | ||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||
| OPERATING ACTIVITIES | |||||||||
| Net (loss) income for the period | (15,188 | ) | (8,301 | ) | (29,892 | ) | 15,675 | ||
| Adjustments reconciling net income to operating cash flows: | |||||||||
| Depreciation and amortization | 20,194 | 19,001 | 62,621 | 47,915 | |||||
| Net gain (loss) on financial instruments | (8,824 | ) | (2,300 | ) | 20,677 | (18,944 | ) | ||
| Unrealized foreign exchange loss (gain) | (1,044 | ) | 3,968 | (8,479 | ) | 2,881 | |||
| Loss on disposal and impairment of non-current assets | 21,904 | 496 | 23,984 | 496 | |||||
| Other operating activities | (10,762 | ) | (2,086 | ) | (18,441 | ) | (4,032 | ) | |
| 6,280 | 10,778 | 50,470 | 43,991 | ||||||
| Changes in non-cash working capital and other items | (1,528 | ) | (6,097 | ) | (9,989 | ) | 627 | ||
| Cash inflow from operating activities | 4,752 | 4,681 | 40,481 | 44,618 | |||||
| INVESTING ACTIVITIES | |||||||||
| Purchase of marketable securities | (100,995 | ) | 3 | (181,642 | ) | (47,892 | ) | ||
| Proceeds on maturity of marketable securities | 43,577 | 90 | 144,817 | 146,986 | |||||
| Investment in funds | (531 | ) | (5,466 | ) | (3,831 | ) | (16,429 | ) | |
| Proceeds from distribution of funds | 577 | 17,519 | 3,985 | 30,931 | |||||
| Purchase of intangible assets | (4,407 | ) | (153 | ) | (22,931 | ) | (220,351 | ) | |
| Other investing activities | (3,245 | ) | (2,524 | ) | (3,477 | ) | 1,476 | ||
| Cash (outflow) inflow from investing activities | (65,024 | ) | 9,469 | (63,079 | ) | (105,279 | ) | ||
| FINANCING ACTIVITIES | |||||||||
| Repurchase of common shares through Normal Course Issuer Bid | (8,684 | ) | (23,508 | ) | (30,069 | ) | (64,415 | ) | |
| Principal repayment on bank loans | (12,095 | ) | (5,688 | ) | (17,542 | ) | (20,599 | ) | |
| Proceeds from bank loans | 51,361 | 7,098 | 51,783 | 9,423 | |||||
| Other financing activities | (724 | ) | (788 | ) | (2,410 | ) | (2,719 | ) | |
| Cash inflow (outflow) from financing activities | 29,858 | (22,886 | ) | 1,762 | (78,310 | ) | |||
| (Decrease) in cash and cash equivalents during the period | (30,414 | ) | (8,736 | ) | (20,836 | ) | (138,971 | ) | |
| Cash and cash equivalents, beginning of the period | 101,822 | 92,490 | 85,963 | 229,592 | |||||
| Net foreign exchange difference | 271 | 2,209 | 6,552 | (4,658 | ) | ||||
| Cash and cash equivalents, end of the period | 71,679 | 85,963 | 71,679 | 85,963 | |||||
| Cash and cash equivalents | 71,679 | 85,963 | |||||||
| Short-term marketable securities | 85,826 | 63,539 | |||||||
| Long-term marketable securities | 15,169 | — | |||||||
| Total cash, cash equivalents and marketable securities | 172,674 | 149,502 | |||||||
