MONTREAL, May 11, 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 first quarter ended March 31, 2023. All currency amounts are in thousands except for share and per share amounts. All currencies are Canadian unless otherwise specified.
Q1 2023 Highlights
Financials
- Revenues were $82,597, an increase of $18,790 or 29% over the same period in prior year.
- Gross margin of $40,762 or 49% compared to $32,477 or 51% in the same period in prior year.
- Adjusted EBITDA1 was $18,237, an increase of $4,925 or 37% over the same period in prior year.
- Adjusted EBITDA per share2 of $0.17, an increase of $0.05 or 45% over the same period in prior year.
- Net loss on financial assets measured at fair value through profit or loss of $11,847.
- Net loss was $3,937, compared to net loss of $18,811 in the same period in prior year.
- Cash inflow from operations was $3,711, compared to a cash inflow from operations of $12,879 in the same period in prior year.
Corporate Developments
- Purchased 2,243,905 common shares through Knight’s NCIB at an average price of $4.83 for an aggregate cash consideration of $10,830.
Products
- Submitted marketing authorization application for 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 ANMAT in Argentina in Q1-23.
- Launched Palbocil® (palbociclib) in Argentina in March 2023.
- Obtained regulatory approval for Bapocil® (palbociclib) in Chile in March 2023.
Subsequent Events
- 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.
- Purchased an additional 1,144,520 common shares through NCIB for an aggregate cash consideration of $5,359.
“I am excited to report impressive Q1 revenues of over $82,000, a 29% growth compared to the same period last year, and a record adjusted EBITDA of over $18,000, representing a growth of 37%. This strong performance is a testament to the hard work and dedication of our team and the continued success of our portfolio and recent launches. I am also proud to announce that we acquired $16 million of shares under the Normal Course Issuer Bid this year, further demonstrating our commitment to delivering value to our shareholders,” said Samira Sakhia, President and Chief Executive Officer of Knight Therapeutics Inc.
1 Adjusted EBITDA is a non-GAAP measure, refer to section “Non-GAAP measures” and “Reconciliation to adjusted EBITDA” for additional details.
2 Adjusted EBITDA per share is a non-GAAP ratio, refer to section “Non-GAAP measures” for additional details.
SELECT FINANCIAL RESULTS REPORTED UNDER IFRS
[In thousands of Canadian dollars]
| Change | ||||||||||
| Q1-23 | Q1-22 | $1 | %2 | |||||||
| Revenues | 82,597 | 63,807 | 18,790 | 29 | % | |||||
| Gross margin | 40,762 | 32,477 | 8,285 | 26 | % | |||||
| Gross margin % | 49 | % | 51 | % | ||||||
| Operating expenses4 | 35,129 | 32,793 | (2,336 | ) | 7 | % | ||||
| Net loss | (3,937 | ) | (18,811 | ) | 14,874 | 79 | % | |||
| EBITDA3 | 18,237 | 13,312 | 4,925 | 37 | % | |||||
| Adjusted EBITDA3 | 18,237 | 13,312 | 4,925 | 37 | % | |||||
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 intangible assets
SELECT FINANCIAL RESULTS AT CONSTANT CURRENCY
[In thousands of Canadian dollars]
| Q1-23 | Q1-22 | Variance | |||||||
| Excluding impact of IAS 293 | |||||||||
| Constant Currency3 | $1 | %2 | |||||||
| Revenues | 82,667 | 66,020 | 16,647 | 25 | % | ||||
| Gross margin | 41,386 | 35,153 | 6,233 | 18 | % | ||||
| Gross margin % | 50 | % | 53 | % | |||||
| Operating expenses4 | 34,827 | 32,914 | (1,913 | ) | 6 | % | |||
| EBITDA3 | 18,237 | 14,193 | 4,044 | 28 | % | ||||
| Adjusted EBITDA3 | 18,237 | 14,193 | 4,044 | 28 | % | ||||
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 intangible assets
SELECT BALANCE SHEET ITEMS
[In thousands of Canadian dollars]
| Change | |||||||||
| 03-31-23 | 12-31-22 | $ | %1 | ||||||
| Cash, cash equivalents and marketable securities | 160,469 | 172,674 | (12,205 | ) | 7 | % | |||
| Trade and other receivables | 160,472 | 151,669 | 8,803 | 6 | % | ||||
| Inventory | 98,988 | 92,489 | 6,499 | 7 | % | ||||
| Financial assets | 164,808 | 176,563 | (11,755 | ) | 7 | % | |||
| Accounts payable and accrued liabilities | 110,994 | 108,730 | 2,264 | 2 | % | ||||
| Bank loans | 75,333 | 70,072 | 5,261 | 8 | % | ||||
1 Percentage change is presented in absolute values
Revenues: For the quarter ended March 31, 2023, revenues, excluding the impact of IAS 29, was $82,667 an increase of $18,833 or 30% compared to the same prior year period. The revenues by therapeutic areas are as follows:
| Excluding impact of IAS 293 | |||||||||
| Change | |||||||||
| Therapeutic Area | Q1-23 | Q1-22 | $1 | %2 | |||||
| Oncology/Hematology | 29,141 | 23,816 | 5,325 | 22 | % | ||||
| Infectious Diseases | 30,848 | 26,682 | 4,166 | 16 | % | ||||
| Other Specialty | 22,678 | 13,336 | 9,342 | 70 | % | ||||
| Total | 82,667 | 63,834 | 18,833 | 30 | % | ||||
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.
The change in revenues by therapeutic areas is explained by the following:
- Oncology/Hematology: The oncology/hematology portfolio grew by approximately $7,600 due to continued growth of key promoted products including Halaven®, Lenvima® and Trelstar® and the assumption of commercial activities of Akynzeo® in Brazil, Argentina and Canada. This increase is offset by a reduction in revenues of our mature and branded generics products due to their lifecycle including the market entrance of new competitors.
- Infectious Diseases: : The infectious disease portfolio grew by approximately $7,800, excluding the impact of the planned transition and termination of the Gilead Amendment. This growth is driven by our key promoted products and the buying patterns of certain customers. In addition, Knight recorded revenues of $2,400 in Q1-23 related to a one-time sales contract with the Ministry of Health in Brazil for Ambisome® (“2022 MOH Contract”). The 2022 MOH Contract was signed in December 2022 for a total value of $18,400 of which $7,000 was delivered in 2022, $2,400 in Q1-23 and $9,000 in April 2023.
In addition to the full amount of the 2022 MOH Contract of $18,400, subsequent to the quarter, Knight received an order for an additional $9,000 (“2023 MOH Contract”) from the Ministry of Health of Brazil which was delivered in April 2023.
- Other Specialty: The Other Specialty portfolio grew by approximately $6,200 excluding the impact of the change in accounting treatment of Exelon® from net profit transfer to revenues with related cost of sales. The increase is mainly due to advance purchases of Exelon® driven by the commercial transition from Novartis to Knight in certain countries as well as the purchasing patterns of certain customers.
Gross margin: Under IFRS, gross margin, as a percentage of revenues, was 49% in Q1-23 and 51% in Q1-22. Excluding the impact of IAS 29, gross margin, as a percentage of revenues, was 50% in Q1-23 and 53% in Q1-22. The decrease in gross margin, as a percentage of revenues, is due to product mix including Exelon® recorded as a net profit transfer in Q1-22 compared to revenues with related cost of sales in Q1-23.
Selling and marketing (“S&M”): For the quarter ended March 31, 2023, S&M expenses were $10,665, an increase of $975 or 10% compared to the same period in prior year. Excluding the impact of IAS 29, the increase is $1,014 or 10%.
General and administrative (“G&A”): For the quarter ended March 31, 2023, G&A expenses were $9,106, an increase of $274 or 3%, compared to the same period in prior year. Excluding the impact of IAS 29, the increase is $342 or 4%.
Research and development (“R&D”): For the quarter ended March 31, 2023, R&D expenses were $4,187, an increase of $1,204 or 40%, compared to the same period in prior year. Excluding the impact of IAS 29, the increase is $1,260 or 44%. The increase is driven by compensation expense and medical initiatives related to key promoted products including Akynzeo® in-licensed in H2-22.
Amortization and impairment of intangible assets: For the quarter ended March 31, 2023, amortization and impairment of intangible assets was $11,171, a decrease of $117 or 1%.
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 March 31, 2023, interest income was $3,352, an increase of 126% or $1,872, compared to the same period in prior year due to higher interest rates on cash and marketable securities.
Interest expense: For the quarter ended March 31, 2023, interest expense was $2,791, an increase of $1,680 or 151%, compared to the same period in prior year due to higher average loan balance resulting from IFC loan received in December 2022 and higher variable interest rates, partially offset by principal repayments of Itaú Unibanco Brasil and Bancolombia bank loans in 2022.
Adjusted EBITDA: For the quarter ended March 31, 2023, adjusted EBITDA was $18,237, an increased of $4,925 or 37%. The decrease in adjusted EBITDA is driven by an increase in gross margin of $8,285, offset by an increase in operating expenses.
Net loss: For the quarter ended March 31, 2023, net loss was $3,937 compared to net loss of $18,811 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 $11,847 versus a net loss of $16,363 in the same period in prior year, mainly due to unrealized revaluations of the strategic fund investments, (2) a foreign exchange gain of $73 versus a foreign exchange loss of $6,189 and (3) the income tax recovery of $1,009 in Q1-23 of driven by the recognition of certain deferred tax assets due to timing differences related to our financial assets, tax loss in certain jurisdictions and certain intercompany transactions, offset by current income tax expense due to operating income, compared to the income tax recovery of $3,501 in Q1-22 driven by the recognition of certain deferred tax assets due tax losses generated and timing differences related to our financial assets.
Cash, cash equivalents and marketable securities: As at March 31, 2023, Knight had $160,469 in cash, cash equivalents and marketable securities, a decrease of $12,205 or 7% as compared to December 31, 2022. The variance is primarily due to outflows certain regulatory and sales milestones on certain products, including AKYNZEO® and ALOXI® from Helsinn, shares repurchased through NCIB, partially offset by cash inflows from operating activities and proceeds from the disposal of Medimetriks.
Financial assets: As at March 31, 2023, financial assets were at $164,808, a decrease of $11,755 or 7%, as compared to the prior year, mainly due to negative mark-to-market adjustments of $11,522 driven by the decline in the share prices of the publicly-traded equities of our strategic fund investments, distributions of $509, offset by foreign exchange gains of $623. Given the nature of the fund investments there could be significant fluctuations in the fair value of the underlying assets.
Bank Loans: As at March 31, 2023, bank loans were at $75,333, an increase of $5,261 or 8% as compared to December 31, 2022, due to accrued interest of $2,186 and the appreciation of BRL, COP, CLP and MXN against CAD.
Product Updates
Knight launched Palbocil® (palbociclib) in Argentina in March 2023. Palbocil® / Bapocil® (palbociclib) 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, in March 2023, Knight obtained regulatory approval for Bapocil® (palbociclib) in Chile.
Corporate Updates
NCIB
During the three-month period ended March 31, 2023, the Company purchased 2,243,905 common shares at an average price of $4.83 for aggregate cash consideration of $10,830. Subsequent to quarter-end up to May 5, 2023, the Company purchased an additional 1,144,520 common shares at an average purchase price of $4.68 for an aggregate cash consideration of $5,359.
Financial Outlook Update
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 has updated its guidance and expects to generate $300 to $320 million in revenue, an increase of $20 million on the lower and upper range. The adjusted EBITDA, as a percentage of revenues is expected to be between 14% to 15% of revenues. The increase in the financial outlook is primarily due to an improvement in the forecasted LATAM currencies against the Canadian dollar and the 2023 MOH Contract for Ambisome®. The guidance is based on a number of assumptions, including but not limited to the following:
- no revenues for business development transactions not completed as at May 10, 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 global pandemics
- 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.
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 first quarter ended March 31, 2023, today at 8:30 am ET. Knight cordially invites all interested parties to participate in this call.
Date: Thursday, May 11, 2023
Time: 8:30 a.m. ET
Telephone: Toll Free: 1-855-669-9657 or International 1-412-317-0790
Webcast: www.knighttx.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.knighttx.com
About Knight Therapeutics Inc.
Knight Therapeutics Inc., headquartered in Montreal, Canada, is a specialty pharmaceutical company focused on acquiring or in-licensing and commercializing pharmaceutical products for Canada and Latin America. Knight's Latin American subsidiaries operate under United Medical, Biotoscana Farma and Laboratorio LKM. Knight Therapeutics Inc.'s shares trade on TSX under the symbol GUD. For more information about Knight Therapeutics Inc., please visit the company's web site at www.knighttx.com or www.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, 2022 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.knighttx.com | Website: www.knighttx.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:
| Q1-23 | |||||||||
| Reported under IFRS | Excluding impact of IAS 291 | Variance | |||||||
| $2 | %3 | ||||||||
| Revenues | 82,597 | 82,667 | (70 | ) | 0 | % | |||
| Cost of goods sold | 41,835 | 41,281 | (554 | ) | 1 | % | |||
| Gross margin | 40,762 | 41,386 | (624 | ) | 2 | % | |||
| Gross margin (%) | 49 | % | 50 | % | |||||
| Expenses | |||||||||
| Selling and marketing | 10,665 | 10,713 | 48 | 0 | % | ||||
| General and administrative | 9,106 | 8,887 | (219 | ) | 2 | % | |||
| Research and development | 4,187 | 4,102 | (85 | ) | 2 | % | |||
| Amortization and impairment of intangible assets | 11,171 | 11,125 | (46 | ) | 0 | % | |||
| Operating income | 5,633 | 6,559 | (926 | ) | 14 | % | |||
1 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
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
NON-GAAP MEASURES
[In thousands of Canadian dollars]
Non-GAAP measures
The Company discloses non-GAAP measures and adjusted EBITDA per share ratio that do not have standardized meanings prescribed by IFRS. The Company believes that shareholders, investment analysts and other readers find such measures helpful in understanding the Company’s financial performance. Non-GAAP financial measures and adjusted EBITDA per share ratio do not have any standardized meaning prescribed by IFRS and may not have been calculated in the same way as similarly named financial measures presented by other companies.
The Company uses the following non-GAAP measures:
Revenues and Financial results excluding the impact of hyperinflation under IAS 29: Revenues and financial results under IFRS are adjusted to remove the impact of hyperinflation under IAS 29. 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 non-current 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 acquisitions.
- 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 months ended March 31, the Company calculated EBITDA and adjusted EBITDA as follows:
| Change | ||||||||
| Q1-23 | Q1-22 | $1 | %2 | |||||
| Operating (loss) income | 5,633 | (316 | ) | 5,949 | n/a4 | |||
| Adjustments to operating (loss) income: | ||||||||
| Amortization and impairment of intangible assets | 11,171 | 11,288 | (117 | ) | 1 | % | ||
| Depreciation of property, plant and equipment and ROU assets | 1,912 | 2,093 | (181 | ) | 9 | % | ||
| Lease costs (IFRS 16 adjustment) | (731 | ) | (646 | ) | (85 | ) | 13 | % |
| Impact of IAS 29 | 252 | 893 | (641 | ) | 72 | % | ||
| EBITDA3 | 18,237 | 13,312 | 4,925 | 37 | % | |||
| Acquisition and transaction costs | — | — | — | n/a4 | ||||
| Other non-recurring expenses | — | — | — | n/a4 | ||||
| Adjusted EBITDA3 | 18,237 | 13,312 | 4,925 | 37 | % | |||
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 Percentage change not relevant
Adjusted EBITDA per share: Adjusted EBITDA over number of common shares outstanding at the end of the respective period.
The Company calculated adjusted EBITDA per share as follows:
| Q1-23 | Q1-22 | ||||
| Adjusted EBITDA1 | 18,237 | 13,312 | |||
| Adjusted EBITDA per common share1 | 0.166 | 0.114 | |||
| Number of common shares outstanding at period end (in thousands) | 110,082 | 116,546 | |||
1 Ajusted EBITDA is non-GAAP measure and adjusted EBITDA per share is a non-GAAP ratio, refer to the definition in section "Non-GAAP Measures" for additional details
INTERIM CONSOLIDATED BALANCE SHEETS
[In thousands of Canadian dollars]
[Unaudited]
As at | ||||
| March 31, 2023 | December 31, 2022 | |||
| ASSETS | ||||
| Current | ||||
| Cash and cash equivalents | 56,218 | 71,679 | ||
| Marketable securities | 89,094 | 85,826 | ||
| Trade receivables | 103,573 | 94,890 | ||
| Other receivables | 13,254 | 12,930 | ||
| Inventories | 98,988 | 92,489 | ||
| Prepaids and deposits | 1,773 | 1,704 | ||
| Other current financial assets | 38,062 | 33,716 | ||
| Income taxes receivable | 2,248 | 2,385 | ||
| Total current assets | 403,210 | 395,619 | ||
| Marketable securities | 15,157 | 15,169 | ||
| Prepaids and deposits | 3,927 | 4,355 | ||
| Right-of-use assets | 5,455 | 5,827 | ||
| Property, plant and equipment | 16,810 | 16,806 | ||
| Intangible assets | 331,518 | 338,780 | ||
| Goodwill | 84,797 | 82,274 | ||
| Other financial assets | 126,746 | 142,847 | ||
| Deferred income tax assets | 13,509 | 9,310 | ||
| Other long-term receivables | 43,645 | 43,849 | ||
| Total non-current assets | 641,564 | 659,217 | ||
| Total assets | 1,044,774 | 1,054,836 |
INTERIM CONSOLIDATED BALANCE SHEETS (continued)
[In thousands of Canadian dollars]
[Unaudited]
As at | ||||
| March 31, 2023 | December 31, 2022 | |||
| LIABILITIES AND EQUITY | ||||
| Current | ||||
| Accounts payable and accrued liabilities | 107,989 | 106,061 | ||
| Lease liabilities | 2,132 | 2,578 | ||
| Other liabilities | 1,687 | 5,793 | ||
| Bank loans | 20,293 | 17,674 | ||
| Income taxes payable | 2,252 | 2,274 | ||
| Other balances payable | 1,099 | 6,941 | ||
| Total current liabilities | 135,452 | 141,321 | ||
| Accounts payable and accrued liabilities | 3,005 | 2,669 | ||
| Lease liabilities | 5,172 | 5,050 | ||
| Bank loan | 55,040 | 52,398 | ||
| Other balances payable | 21,903 | 23,176 | ||
| Deferred income tax liabilities | 5,333 | 4,365 | ||
| Total liabilities | 225,905 | 228,979 | ||
| Shareholders’ Equity | ||||
| Share capital | 587,173 | 599,055 | ||
| Warrants | 117 | 117 | ||
| Contributed surplus | 24,447 | 23,664 | ||
| Accumulated other comprehensive loss | 48,154 | 41,266 | ||
| Retained earnings | 158,978 | 161,755 | ||
| Total shareholders’ equity | 818,869 | 825,857 | ||
| Total liabilities and shareholders’ equity | 1,044,774 | 1,054,836 | ||
INTERIM CONSOLIDATED STATEMENTS OF LOSS
[In thousands of Canadian dollars, except for share and per share amounts]
[Unaudited]
| Three months ended March 31, | ||||
| 2023 | 2022 | |||
| Revenues | 82,597 | 63,807 | ||
| Cost of goods sold | 41,835 | 31,330 | ||
| Gross margin | 40,762 | 32,477 | ||
| Expenses | ||||
| Selling and marketing | 10,665 | 9,690 | ||
| General and administrative | 9,106 | 8,832 | ||
| Research and development | 4,187 | 2,983 | ||
| Amortization and impairment of intangible assets | 11,171 | 11,288 | ||
| Operating (loss) income | 5,633 | (316 | ) | |
| Interest income on financial instruments measured at amortized cost | (2,179 | ) | (346 | ) |
| Other interest income | (1,173 | ) | (1,134 | ) |
| Interest expense | 2,791 | 1,111 | ||
| Other expense | 94 | 90 | ||
| Net loss on financial instruments measured at fair value through profit or loss | 11,847 | 16,363 | ||
| Foreign exchange (gain) loss | (73 | ) | 6,189 | |
| Gain on hyperinflation | (728 | ) | (277 | ) |
| Income (loss) before income taxes | (4,946 | ) | (22,312 | ) |
| Income tax | ||||
| Current | 2,106 | 173 | ||
| Deferred | (3,115 | ) | (3,674 | ) |
| Income tax recovery | (1,009 | ) | (3,501 | ) |
| Net loss for the period | (3,937 | ) | (18,811 | ) |
| Basic and diluted net loss per share | (0.04 | ) | (0.16 | ) |
| Basic and diluted weighted average number of common shares outstanding | 111,518,305 | 117,173,258 | ||
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
[In thousands of Canadian dollars]
[Unaudited]
| Three months ended March 31, | ||||
| 2023 | 2022 | |||
| OPERATING ACTIVITIES | ||||
| Net loss for the period | (3,937 | ) | (18,811 | ) |
| Adjustments reconciling net income to operating cash flows: | ||||
| Depreciation and amortization | 13,083 | 13,381 | ||
| Net gain on financial instruments | 11,847 | 16,363 | ||
| Unrealized foreign exchange loss | (1,253 | ) | 6,650 | |
| Other operating activities | (1,104 | ) | (2,811 | ) |
| 18,636 | 14,772 | |||
| Changes in non-cash working capital and other items | (14,925 | ) | (1,893 | ) |
| Cash inflow from operating activities | 3,711 | 12,879 | ||
| INVESTING ACTIVITIES | ||||
| Purchase of marketable securities | (109,216 | ) | (15,808 | ) |
| Proceeds on maturity of marketable securities | 105,968 | 36,546 | ||
| Investment in funds | (22 | ) | (40 | ) |
| Purchase of intangible assets | (7,667 | ) | (234 | ) |
| Other investing activities | 2,223 | 354 | ||
| Cash (outflow) inflow from investing activities | (8,714 | ) | 20,818 | |
| FINANCING ACTIVITIES | ||||
| Repurchase of common shares through Normal Course Issuer Bid | (10,514 | ) | (6,663 | ) |
| Principal repayment on bank loans | (587 | ) | — | |
| Proceeds from bank loans | 647 | 422 | ||
| Other financing activities | (813 | ) | (571 | ) |
| Cash outflow from financing activities | (11,267 | ) | (6,812 | ) |
| Increase (decrease) in cash and cash equivalents during the period | (16,270 | ) | 26,885 | |
| Cash and cash equivalents, beginning of the period | 71,679 | 85,963 | ||
| Net foreign exchange difference | 809 | 609 | ||
| Cash and cash equivalents, end of the period | 56,218 | 113,457 | ||
| Cash and cash equivalents | 56,218 | 113,457 | ||
| Marketable securities | 104,251 | 42,939 | ||
| Total cash, cash equivalents and marketable securities | 160,469 | 156,396 | ||
