Atrium Revenue Grows in 2010

QUEBEC CITYAtrium Innovations Inc. (TSX: ATB) grew its revenue by 11.6 percent over last year to reach $356.6 million, according to its recently released 2010 fourth quarter and full-year financial results for the period ended December 31, 2010. Its North American branded business posted 9.5-percent growth in 2010, and its sales in Germany troughed in Q2 and improved sequentially in Q3 and Q4. Its EBITDA of $83.9 million equated to 23.5 percent of revenues and diluted EPS of $1.55 for the year. During the year, it also completed three strategic acquisitionsTrophic, Minami and Seroyalrepresenting an investment of more than $130 million.

We are pleased by our performance in 2010 as our North American business did very well, particularly our branded business which expanded by 9.5 percent, above forecasted industry growth and in line with our expectations," said Pierre Fitzgibbon, president and CEO. On the other hand, our European business was more of a challenge with basically flat industry growth rates in Germany and Holland. While we experienced product transition issues in Germany during the year which caused significant sales decline, we quickly made adjustments to our strategy and consequently revenues progressively improved over the past two quarters, providing us with the confidence that we are rebuilding our base in Germany."

He continued, Fourth quarter revenues and EBITDA were in line with our expectations and guidance. Factors that negatively impacted year-over-year comparisons included unfavorable exchange rates, lower sales in Germany, the introduction and ramp-up of new products at a large client of Garden of Life in 2009, and soft sales in the volatile direct to consumer segment. The latter two factors impacted the North American branded business, which in aggregate grew by 2.0 percent over last year.

He also added the acquisitions of Minami and Seroyal announced in December 2010  were sound industry fundamentals and cross-selling opportunities" that should fuel healthy growth rates for Atrium in 2011 and beyond."

For the fiscal year ended December 31, 2010, Atrium recorded revenues of $356.6 million representing an increase of 11.6 percent compared to revenues of $319.7 million in 2009. The company said this increase is mainly attributable to the acquisitions of Trophic and Garden of Life as well as to organic growth of North American branded business, partly offset by a decrease in sales in Germany as well as adverse exchange rates. Excluding the impact on European operations of unfavorable exchange rates between the euro and the U.S. dollar, revenue would have been higher by $5.8 million or 13.4-percent when compared to 2009.

EBITDA increased by 3.9 percent to $83.9 million or 23.5 percent of revenues compared to $80.8 million or 25.3 percent of revenues for the same period in 2009. Without the negative impact of the euro/U.S. dollar exchange rate, EBITDA would have increased by 5.7 percent to $85.3 million, according to the company.

Net earnings were $51.6 million in 2010 compared to $48.7 million in 2009, representing an increase of 6.0 percent. Net earnings per share (EPS") on a diluted basis rose to $1.55 per share, as compared to $1.47 per share for the same period in 2009.

Cash flows from operating activities before changes in non-cash working capital items were $59.3 million, an increase of 10.1 percent compared to $53.9 million in 2009. As at December 31, 2010, the Company had a total debt of $275.8 million and a cash position of $12 million. The Company has a revolving credit facility that provides $300 million of borrowing capacity, of which approximately $40 million is available.

For the fourth quarter ended December 31, 2010, Atrium recorded revenues of $92.5 million representing a decrease of 2.6 percent compared to $95.0 million for the corresponding period in 2009. The company said the decrease is mainly attributable to the negative impact of the euro/U.S. dollar exchange rate when compared to the corresponding period last year representing $3.0 million, the lower sales in Germany, the launch of new products at a large client of Garden of Life last year, and softer sales in the direct to consumer market.

EBITDA for the fourth quarter of 2010 was $21.2 million or 22.9 percent of revenue compared to $23.0 million or 24.2 percent of revenues for the same period in 2009. Net earnings were $13.4 million in 2010 compared to $13.8 million in 2009, representing a decrease of 3.3 percent. EPS for the quarter were $0.40 per diluted share compared $0.42 per diluted share in 2009.

Cash flows from operating activities before changes in non-cash working capital items were $15.1 million in 2010 compared to $16.2 million in 2009.