[2] DRAXIS Health Reports Third Quarter Results.MISSISSAUGA Mississauga (mĭsĭsaw`gə), city (1991 pop. 463,388), S Ont., Canada, 12 mi (20 km) W of Toronto on Lake Ontario. A residential suburb of Toronto and a growing transportation and industrial center, it is one of Canada's fastest-growing , Ontario--(BUSINESS WIRE)--Nov. 10, 1999-- (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :DRAX Drax could refer to:
TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :DAX.) DRAXIS Health Inc. (TSE: DAX; NASDAQ: DRAX) today reported results for the third quarter ended September September: see month. 30, 1999. Quarterly revenues of $9,352,000 decreased 4.8% over the comparable period in 1998 while year to date revenues of $31,529,000 increased 28.6%. The EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become loss in the quarter of $770,000 improved from a loss of $963,000 in 1998. Year to date EBITDA of $1,620,000 compares with a loss of $2,862,000 in 1998. Net loss for the quarter of $1,550,000, or $0.04 per share, compares with a loss in 1998 of $1,268,000, or $0.04 per share. On a year to date basis, excluding the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of product rights in the second quarter, the loss was $1,011,000, or $0.03 per share, compared with a loss of $3,380,000, or $0.11 per share, in 1998. In commenting on the third quarter results, Dr. Martin Barkin, President and Chief Executive Officer of DRAXIS, stated: "During the quarter, the Company continued to focus on and develop the potential of it core operating platforms. All major capital projects were advanced on schedule, including the radiopharmaceutial laboratories, lyophilization lyophilization /ly·oph·i·li·za·tion/ (li-of?i-li-za´shun) the creation of a stable preparation of a biological substance by rapid freezing and dehydration of the frozen product under high vacuum. facility, and the integrated enterprise resource planning See ERP. (application, business) Enterprise Resource Planning - (ERP) Any software system designed to support and automate the business processes of medium and large businesses. (ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ) system. Two of our pipeline products, Amiscan (TM) and Fibrimage (R), were the subject of favourable clinical presentations and the Company prepared to launch the first of the Elan (Emulated LAN) A virtual LAN in the ATM world. See LANE and virtual LAN. Elan - ["Top-down Programming with Elan", C.H.A. Koster, Ellis Horwood 1987]. products. Significant progress was also achieved on a number of business agreements which have since been finalized See finalization. in October October: see month. and November November: see month. . Third quarter financial results were affected by a number of non-recurring production delays and lower than expected sales levels of Anipryl (R)."
FINANCIAL HIGHLIGHTS
(thousands of Canadian dollars except per share amounts and in
accordance with Canadian GAAP)
(unaudited)
1999 1998
-----------------------------------------------------
Q3 Q2 Q1 Q4 Q3
-----------------------------------------------------
Operations
----------
Revenues
--------
Canadian
Pharmaceuticals $ 3,307 $ 3,627 $ 2,917 $ 3,741 $ 3,660
Radiopharma-
ceuticals 1,846 2,040 2,345 1,728 2,145
Royalties-
Companion
Animal Health 545 813 1,662 419 447
Manufacturing 3,831 4,699 4,593 3,024 3,576
Intercompany (177) (359) (160) - -
------ ------ ------ ------ ------
9,352 10,820 11,357 8,912 9,828
------ ------ ------ ------ ------
Milestones - - - 19,903 -
9,352 10,820 11,357 28,815 9,828
EBITDA 1 (770) 1,079 1,311 14,659 (963)
Rights Acquired
for Non-Approved
Products - (12,452) - - -
Depreciation and
Amortization (1,246) (1,071) (1,071) (1,174) (1,056)
------- ------- ------- ------- -------
Income (Loss)
From Operations (2,016) (12,444) 240 13,485 (2,019)
------- ------- ------- ------- -------
Net Income
(Loss) $ (1,550) $ (6,838) $ 215 $ 8,425 $ (1,268)
Net Income
(Loss) Per
Share $ (0.04) $ (0.21) $ 0.01 $ 0.27 $ (0.04)
Financial Position
------------------
Cash and Cash
Equivalents $ 6,002 $ 8,775 $ 10,762 $ 3,676 $ 7,984
Shareholders'
Equity 58,819 60,369 57,201 56,892 48,472
Weighted Average
Number of Shares
Outstanding 34,895,573 32,450,122 32,352,578 32,280,524 32,273,654
----------------------------------------------------
1 Earnings (loss) before interest, taxes, depreciation, amortization
and other non-recurring expenses.
FINANCIAL REVIEW Third quarter revenues of $9,352,000 decreased 4.8% over the corresponding period in 1998 mainly due to the timing of shipments, which are expected to be shifted into the fourth quarter. Cost of sales of $6,152,000 in the third quarter represents 65.8% of sales versus a ratio of 57.1% in 1998. This increased percentage was due to fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). , which continued at normal levels despite lower revenues caused by non-recurring start-up Start-up The earliest stage of a new business venture. and production interruptions. Selling, general and administration expenses of $3,578,000 decreased 19.7% over last year due to a reduction in marketing and sales activity following last year's restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of the Company's U.S. dermatology dermatology (dûrmətŏl`əjē), branch of medicine concerned with diagnosis and treatment of diseases and disorders of the skin. operations. Expenditures on research and development activities (net of investment tax credits) of $392,000 in the third quarter compares with $722,000 spent in the previous year. Expenditure levels are expected to rise in the fourth quarter, coincident co·in·ci·dent adj. 1. Occupying the same area in space or happening at the same time: a series of coincident events. See Synonyms at contemporary. 2. with the commencement of Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA trials for Fibrimage (R). Loss from operations before interest, taxes, depreciation and amortization of $770,000 for the third quarter compares with a loss of $963,000 incurred last year due mainly to improved results in Pharmaceutica, as further explained below. Depreciation and amortization of $1,246,000 compares with $1,056,000 incurred last year. The increase is due to the commencement of amortization of expenditures related to the ERP system and the radiopharmaceutical radiopharmaceutical /ra·dio·phar·ma·ceu·ti·cal/ (-fahr?mah-soo´ti-k'l) a radioactive pharmaceutical, nuclide, or other chemical used for diagnostic or therapeutic purposes. laboratories. Net loss for the third quarter was $1,550,000 or $0.04 per share, equal to last year on a per share basis. Cash and cash equivalents at the end of the third quarter were $6,002,000 as compared with June June: see month. 30, 1999 balances of $8,775,000, representing a decrease of $2,773,000 due mainly to capital expenditures. During the quarter, the Company entered into a lending agreement Lending agreement A contract regarding funds transferred between a lender and a borrower. with a Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. chartered bank Chartered Bank A financial institution whose primary roles are to accept and safeguard monetary deposits from individuals and organizations, and to lend money out. The details vary from country to country, but usually a chartered bank in operation has obtained government permission for $6 million, used to fund a portion of the licensing fee paid to Elan. UNITED STATES United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). INFORMATION The following table summarizes DRAXIS' results under both United States and Canadian GAAP:
1999 1998
-----------------------------------------------------
Q3 Q2 Q1 Q4 Q3
-----------------------------------------------------
US GAAP
-------
Net Income
(Loss) $ (1,435) $ (6,723) $ 330 $ 8,540 $ (1,153)
Net Income
(Loss) Per
Share $ (0.04) $ (0.21) $ 0.01 $ 0.27 $ (0.04)
Canadian GAAP
Net Income
(Loss) $ (1,550) $ (6,838) $ 215 $ 8,425 $ (1,268)
Net Income
(Loss) Per
Share $ (0.04) $ (0.21) $ 0.01 $ 0.27 $ (0.04)
-----------------------------------------------------
COMPANION ANIMAL HEALTH (ANIPRYL (R)) Companion Animal Health segment revenues represent Anipryl(R) royalty income, which amounted to $545,000 in the third quarter of 1999 as compared with $447,000 in 1998 and $813,000 in the second quarter of 1999. Developing the Anipryl(R) market for cognitive dysfunction dysfunction /dys·func·tion/ (dis-funk´shun) disturbance, impairment, or abnormality of functioning of an organ.dysfunc´tional erectile dysfunction impotence (2). has proven more challenging than anticipated and this is reflected in slower than anticipated sales. However, Pfizer Pfizer Incorporated (NYSE: PFE) is a major research-based pharmaceutical company, which ranks number two in sales The company is based in New York City. It produces the number-one selling drug Lipitor (atorvastatin, used to lower blood cholesterol); the oral antifungal Animal Health, the Company's marketing partner, is committed to investing significantly in market development for this claim and is revising its marketing strategies following a review of the first nine months performance. Third quarter EBITDA from this segment of $287,000 compare with $195,000 last year, prior to receipt of U.S. regulatory approval for the treatment of canine canine or canid Any domestic or wild dog or doglike mammal (e.g., wolf, jackal, fox) in the family Canidae, found throughout the world except in Antarctica and on most ocean islands. cognitive dysfunction syndrome. While sales growth has been slower than expected, the Company is encouraged by market research surveys indicating that veterinarians Veterinarians and veterinary surgeons (vets) are medical professionals who operate exclusively on animals. Well-known and notable veterinarians include:
CANADIAN PHARMACEUTICALS Third quarter revenues of $3,307,000 were 9.6% below last year's level due mainly to declining sales of the Company's selegiline selegiline /se·le·gil·ine/ (se-lej´i-len) an antiparkinsonian agent used as the hydrochloride salt in conjunction with levodopa and carbidopa. based products, Eldepryl El·de·pryl A trademark for the drug selegiline hydrochloride. selegiline hydrochloride Apo-Selegiline (CA), Eldepryl, Emsam Gen-Selegiline (CA), Novo-Selegiline (CA), Nu-Selegiline (CA), SD Deprenyl (CA), Zelapar (R) and Novo-Selegiline partially offset by growth in Canadian dermatology revenues. Segment EBITDA for the third quarter of $724,000 compare with a loss of $930,000 in 1998. This increase in profitability is predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. the result of a reduction in expenses associated with the restructuring of the Company's U.S. dermatology operations at the end of 1998. The Company is preparing for the Canadian launches of two of the products acquired from Elan: Zanaflex Zanaflex® Tizanidine Neurology An agent used to manage ↑ muscle tone in spasticity–eg, in spinal cord injury, multiple sclerosis. See Spasticity. (R), for the management of muscle spasticity spasticity /spas·tic·i·ty/ (spas-tis´i-te) the state of being spastic; see spastic (2). spas·tic·i·ty n. 1. A spastic state or condition. 2. Spastic paralysis. , and Diastat (R), for the treatment of breakthrough seizures In counterdrug operations, includes drugs and conveyances seized by law enforcement authorities and drug-related assets (monetary instruments, etc.) confiscated based on evidence that they have been derived from or used in illegal narcotics activities. . During the third quarter $132,000 in incremental costs Costs which are additional costs to the Service appropriations that would not have been incurred absent support of the contingency operation. See also financial management. were incurred in support of these upcoming launches and it is expected that these costs will increase in the fourth quarter. During early November, the Company announced the commencement of its on-line shopping capability for U.S. consumers in respect of its dermatology and podiatry podiatry (pōdī`ətrē, pə–), science concerned with disorders, diseases, and deformities of the feet, also called chiropody. Podiatrists treat such common conditions as bunions, corns and calluses, and ingrown toenails. products, SpectroDerm (R) and Kerasal (TM) through its new website at www.spectroderm.com. RADIOPHARMACEUTICALS Third quarter revenues from the Company's radiopharmaceutical unit of $1,846,000 decreased 13.9% over the corresponding period in 1998 due to temporary production and shipping delays which are not expected to impact the fourth quarter. Segment EBITDA for this business unit of $451,000 compare with $798,000 earned last year. In October, the Company announced the signing of a licensing agreement with Isogenic isogenic /iso·gen·ic/ (-jen´ik) syngeneic. isogenic (ī´sōjen´ik), adj originating from a common source; possessing the same genetic composition. Science Ltd. with respect to Iodine-125 brachytherapy brachytherapy /brachy·ther·a·py/ (-ther´ah-pe) treatment with ionizing radiation whose source is applied to the surface of the body or within the body a short distance from the area being treated. seeds for the treatment of prostate cancer prostate cancer, cancer originating in the prostate gland. Prostate cancer is the leading malignancy in men in the United States and is second only to lung cancer as a cause of cancer death in men. , for which manufacturing and marketing activities are expected to commence in 2000. Research and development activities are continuing, with major emphasis on Fibrimage (R) for early detection of deep venous thrombosis deep venous thrombosis n. Abbr. DVT A condition in which one or more thrombi form in a deep vein, especially in the leg or pelvis, resulting in an increased risk of pulmonary embolism. and Amiscan (TM) for imaging of heart attack, which was the subject of a favourable article in the November 1999 issue of Journal of Nuclear Medicine. DRAXIS recently concluded a licensing agreement for the exclusive rights to manufacture and sell Amiscan (TM) globally, except for specified countries in southeastern Asia. MANUFACTURING Manufacturing revenues have been reclassified for accounting purposes, and now include both DRAXIS Pharma sales as well as Anipryl (R) product sales to Pfizer. Third quarter revenues of $3,831,000 were 7.1% ahead of levels achieved during the comparable quarter of 1998. The variance The discrepancy between what a party to a lawsuit alleges will be proved in pleadings and what the party actually proves at trial. In Zoning law, an official permit to use property in a manner that departs from the way in which other property in the same locality to last year was due to increased sales of Anipryl (R) to Pfizer, offset by lower revenues at DRAXIS Pharma due to longer than expected startup following regularly scheduled maintenance and the connection of the lyophilization chamber with the existing sterile sterile /ster·ile/ (ster´il) 1. unable to produce offspring. 2. aseptic. ster·ile adj. 1. Not producing or incapable of producing offspring. 2. core. This was accomplished successfully and test batches are now being run. Fourth quarter revenues are expected to improve as new manufacturing contracts come on stream. Segment EBITDA losses totalled $829,000 during the third quarter as compared with income of $105,000 during the comparable period in 1998. Start up costs and activities in anticipation of new revenues expected to commence in the fourth quarter, contributed to this negative performance for the quarter. 1998 segment operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. in effect at DRAXIS Pharma were borne by the vendor as part of the acquisition agreement. YEAR 2000 ISSUE (Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 ) During the spring of 1998, the Company undertook a detailed review of all of its computerized computerized adapted for analysis, storage and retrieval on a computer. computerized axial tomography see computed tomography. systems and assessed the potential exposure to Year 2000 systems issues which might have had a detrimental det·ri·men·tal adj. Causing damage or harm; injurious. det  ri·men impact on
the ongoing operations of the business. This review formed the basis of
a detailed information systems plan which was completed and adopted by
the Company in July 1998.The central focus of the Company's plan is a new company-wide ERP system which successfully completed its first phase of implementation across the Company in early July 1999. The total cost of the project, now fully funded, was $3.1 million. Certain process control systems at DRAXIS Pharma were identified as having potential exposure to Year 2000 risk. Rectification rectification /rec·ti·fi·ca·tion/ (rek?ti-fi-ka´shun) 1. the act of making straight, pure, or correct. 2. redistillation of a liquid to purify it. and testing of these systems was substantially completed by December 31, 1998, the aggregate cost of which was less than $100,000. The Company now believes that it is in full Y2K compliance on all of its internal systems. Risks of third party compliance are not directly within the Company's control and are difficult to assess. Accordingly, it is not possible to be certain that all aspects of Year 2000 issues which could affect the Company, including those related to the efforts of customers, suppliers, or other third parties, will be fully resolved. The Company is working with its major business partners to mitigate mit·i·gate v. To moderate in force or intensity. mit i·ga tion n. its exposure to any risks in this area.Contingency plans A plan involving suitable backups, immediate actions and longer term measures for responding to computer emergencies such as attacks or accidental disasters. Contingency plans are part of business resumption planning. in the event of Year 2000 difficulties being considered by the Company include the stockpiling stock·pile n. A supply stored for future use, usually carefully accrued and maintained. tr.v. stock·piled, stock·pil·ing, stock·piles To accumulate and maintain a supply of for future use. of raw material inventories, alternate sources of supply of goods and/or services, and an allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of ERP installation resources on the Company system applications most sensitive to Year 2000 risk. OTHER DEVELOPMENTS The Company and its Board of Directors continue to be concerned that DRAXIS' share price does not properly reflect the underlying value of its current businesses and prospects. Accordingly the Company has retained Gruntal & Co. LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , a U.S. based national securities brokerage firm, to assist the Board of Directors and the Company in reviewing strategic alternatives to maximize shareholder value. OUTLOOK Revenues and profitability at DRAXIMAGE are expected to improve during the fourth quarter and beyond. Production capacity restraints have been overcome on radioactive ra·di·o·ac·tive adj. Of or exhibiting radioactivity. radioactive characterized by radioactivity. radioactive decay "hot" products and non-radioactive "kit" production is expected to come on stream mid- mid- pref. Middle: midbrain. 2000 once the lyophilization line has received the necessary regulatory approvals. Anipryl (R) will continue to contribute to earnings, although at a slower rate of growth than originally expected. At DRAXIS Pharma, new third party manufacturing contracts are now being qualified and are expected to come on line in the fourth quarter and beyond. These new contracts will add additional throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. to the facility and help this division move towards profitability. DRAXIS Pharmaceutica has been performing to management expectations and is expected to continue this trend. While product introductions will build revenues, short term profitability in this division will be affected by marketing and launch costs associated with the introduction of the Elan portfolio of drugs into the Canadian marketplace. On a consolidated basis, the Company expects to be close to EBITDA breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations for the year 1999. The Company expects consistently positive quarterly EBITDA results to be forthcoming in the near future. DRAXIS Health Inc. is a diversified diversified (di·verˑ·s specialty pharmaceutical company operating in three niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. : Radiopharmaceuticals (DRAXIMAGE), Companion Animal Health (through its global alliance with Pfizer Inc.) and Canadian sales and marketing (DRAXIS Pharmaceutica). DRAXIS supports its own as well as third party manufacturing requirements through its subsidiary, DRAXIS Pharma, located in Kirkland, Quebec Kirkland is a municipality on the Island of Montreal in southwestern Quebec, Canada. As of October 2005, the population was 21,735. It is named after Dr. Charles-Aimé Kirkland, a Quebec provincial politician. . Except for historical information, this news release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risk and uncertainties, which may cause actual results to differ materially from the statements made. Such factors include, but are not limited to, changing market conditions, clinical trial results, the establishment of new corporate alliances, the impact of competitive products and pricing, the timely development, regulatory approval and market acceptance of the Company's products, and other risks detailed from time-to-time in the Company's filings with the U.S. Securities and Exchange Commission and Canadian securities authorities.
DRAXIS HEALTH INC.
CONSOLIDATED BALANCE SHEET
(stated in thousands of Canadian dollars except share related data and
in accordance with Canadian GAAP)
(unaudited)
September 30,
--------------------------
1999 1998
--------------------------
ASSETS
CURRENT
Cash and cash equivalents $ 6,002 $ 7,984
Accounts receivable 6,640 7,729
Inventory 6,361 7,987
Income taxes recoverable 1,783 2,182
Prepaid expenses 1,273 1,101
-------- --------
$ 22,059 26,983
-------- --------
Long-term investments 455 691
Fixed assets 29,263 16,595
Goodwill (net of accumulated
amortization) 8,497 9,640
Patents, licenses and other
deferred charges 20,607 9,938
Deferred income taxes 9,199 3,881
-------- --------
$ 90,080 $ 67,728
-------- --------
-------- --------
LIABILITIES
CURRENT
Accounts payable and
accrued charges $ 4,037 $ 7,884
Current portion of
long-term debt 12,215 -
-------- --------
16,252 7,884
Long-term debt 15,009 11,372
-------- --------
31,261 19,256
-------- --------
SHAREHOLDERS' EQUITY
Capital stock 71,853 61,758
Contributed surplus 9,701 9,701
Deficit (22,735) (22,987)
--------- ---------
58,819 48,472
--------- ---------
$ 90,080 $ 67,728
--------- ---------
--------- ---------
Draxis Health Inc.
Consolidated Statement of Operations
(stated in thousands of Canadian dollars except share related data and
in accordance with Canadian GAAP)
(unaudited)
For the Three Month Period For the Nine Month Period
Ended September 30, Ended September 30,
-------------------------- -------------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
$ 9,352 $ 9,828 Revenues $ 31,529 $ 24,526
Expenses
6,152 5,615 Cost of sales 18,574 12,316
3,578 4,454 Selling, general and 9,992 13,079
administration 1,607 2,278
500 832 Research and
development
(108) (110) Investment tax credits (264) (285)
----------- --------- on research and ---------- ----------
development
(770) (963) Income (loss) from 1,620 (2,862)
operations before
the undernoted
- - Rights acquired for 12,452 -
non-approved products
1,246 1,056 Depreciation and 3,386 2,913
amortization
----------- --------- ---------- ----------
(2,016) (2,019) Loss from operations (14,218) (5,775)
----------- --------- ---------- ----------
Financial
(21) 15 Interest income 426 550
(422) (199) Financing expense (1,035) (453)
25 - Gain on disposition of 1,073 -
investment
(418) (184) 464 97
(2,434) (2,203) Loss before income (13,754) (5,678)
taxes
(884) (935) Recovery of income (5,583) (2,298)
taxes
----------- --------- ---------- ----------
$ (1,550) $ (1,268) Net loss for the $ (8,171) $ (3,380)
period
$ (0.04) $ (0.04) Net loss per share $ (0.25) $ (0.11)
----------- ---------- ----------- ------------
----------- ---------- ----------- ------------
34,895,573 32,273,654 Weighted Average 33,242,073 31,839,555
Number of Shares
Outstanding
Note: The comparative consolidated financial statements have been
reclassified to conform with the current year's presentation.
DRAXIS HEALTH INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(stated in thousands of Canadian dollars and in accordance with
Canadian GAAP) (unaudited)
For The Three Month For The Nine Month
Period Ended September 30, Period Ended September 30,
-------------------------- --------------------------
1999 1998 1999 1998
---- ---- ---- ----
Cash Flows (used in) from operating activities
$ (1,550) $ (1,268) Net loss for the period $ (8,171) $ (3,380)
Non cash transactions
reflected in net income
Depreciation and
1,246 1,056 amortization 3,386 2,913
889 - Deferred income taxes (3,713) (675)
Amortization of deferred
52 - financing costs 91 -
50 - Interest on long-term debt 142 -
Gain on disposition of
(25) - investment (1,073) -
------- ------ ------- -------
662 (212) (9,338) (1,142)
------- ------ ------- -------
Changes in non-cash working
capital (net of effects of
acquisition of subsidiary)
Decrease (increase) in
249 901 trade and other receivables20,635 (169)
Decrease in current income
(16) (658) taxes payable (6,184) (1,963)
Decrease (increase) in
216 (756) inventories 244 518
(Increase) decrease in
343 1,235 prepaid expenses (499) (190)
Decrease in accounts
(6,697) (5,309) payables (7,891) (749)
------- ------ ------- -------
(5,905) (4,587) 6,305 (2,553)
------- ------ ------- -------
Net cash flows used in operating
(5,243) (4,799) activities (3,033) (3,695)
------- ------ ------- -------
Cash flows (used in) from
investing activities
(3,641) (252) Purchase of fixed assets (11,512) (3,643)
(Increase) decrease in other
(101) 50 deferred charges (592) 198
- - Purchase of product rights (3,611) -
Proceeds from sale of
31 - investments 1,309 -
Acquisition (net of cash
- - acquired) - (15,557)
------- ------ ------- -------
Net cash flows used in investing
(3,711) (202) activities (14,406) (19,002)
------- ------ ------- -------
Cash flows from financing activities
Proceeds from long-term
6,181 6,172 borrowings 9,664 7,395
Other issuances of shares
- 87 and warrants 10,101 3,024
------- ------ ------- -------
Net cash flows from financing
6,181 6,259 activities 19,765 10,419
------- ------ ------- -------
Net increase (decrease) in cash
(2,773) 1,258 and cash equivalents 2,326 (12,278)
Cash and cash equivalents at
8,775 6,726 beginning of period 3,676 20,262
------- ------ ------- -------
Cash and cash equivalents at
$ 6,002 $7,984 end of period $ 6,002 $ 7,984
-------- ------ ------- --------
Cash and cash equivalents comprise of cash, commercial paper and
treasury bills.
DRAXIS HEALTH INC.
SEGMENTED INFORMATION
(stated in thousands of Canadian dollars and in accordance with
Canadian GAAP)
(unaudited)
For the Three Month Period, For the Nine Month
Ended September 30, Period Ended September 30
1999 1998 1999 1998
Revenues
$ 3,307 $ 3,660 Canadia Pharmaceuticals $ 9,851 $ 10,354
1,846 2,145 Radiopharmaceuticals 6,231 5,780
Royalties-Companion
545 447 Animal Health 3,020 1,340
3,831 3,576 Manufacturing 13,123 7,052
(177) - Intercompany (696) -
-------- -------- --------- ---------
$ 9,352 $ 9,828 $ 31,529 $ 24,526
-------- -------- --------- ---------
Segment Income 1
$ 724 $ (930) Canadian Pharmaceuticals $ 2,410 $ (2,471)
451 798 Radiopharmaceuticals 2,135 2,026
Royalties-Companion Animal
287 195 Health 2,435 407
(829) 105 Manufacturing (1,092) 234
(1,287) ( 1,131) Corporate (4,248) (3,058)
(116) - Intercompany (20) -
-------- -------- --------- --------
$ (770) $ (963) $ 1,620 $ (2,862)
-------- -------- --------- ---------
Depreciation and Amortization
$ 530 $ 497 Canadian Pharmaceuticals $ 1,583 $ 1,496
345 321 Radiopharmaceuticals 970 961
Royalties-Companion
14 2 Animal Health 42 6
329 191 Manufacturing 703 318
28 45 Corporate 88 132
-------- -------- --------- ---------
$ 1,246 $ 1,056 $ 3,386 $ 2,913
-------- -------- --------- ---------
Income (loss) from operations
$ 194 $(1,427) Canadian Pharmaceuticals $ 827 $ (3,967)
106 477 Radiopharmaceuticals 1,165 1,065
Royalties-Companion
273 193 Animal Health 2,393 401
(1,158) (86) Manufacturing (1,795) (84)
1,315) (1,176) Corporate (4,336) (3,190)
(116) - Intercompany (20) -
Rights acquired from non-
- - approved products (12,452) -
-------- -------- --------- ---------
$(2,016) $(2,019) $ (14,218) $ (5,775)
-------- -------- --------- ---------
Identifiable Assets
Canadian Pharmaceuticals $ 37,581 $ 22,404
Radiopharmaceuticals 13,968 12,052
Companion Animal Health (885) 1,118
Manufacturing 32,588 22,997
Corporate 6,828 9,157
--------- --------
1 Segment earnings before interest, taxes,
depreciation, amortization and other
non-recurring expenses. $ 90,080 $ 67,728
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