DRAXIS Health Reports Second Quarter Results; Net Income of $0.01 Per Share From Continuing Operations On 17% Revenue Growth.Business Editors 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)--Aug. 15, 2002 DRAXIS Health Inc. (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:
TSX Transfer from Stack Pointer to Index TSX True Space Extension :DAX) reported operating results for the second quarter of 2002 ended June June: see month. 30, 2002. All amounts are expressed in US dollars. Revenues from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $9.7 million for the quarter and $19.9 million for the first half of 2002 represent increases of 17.3% and 18.0% over 2001. Operating profitability, or 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 (pre R&D and non-recurring items), for the three and six-month periods of 2002 increased 34.1% and 54.2% over 2001 to $1.9 million and $4.3 million. Second quarter net income, before non-recurring items, was $0.4 million, ($0.01 per share), bringing six-month net income, before non-recurring items, to $1.3 million ($0.036 per share). The second quarter of 2002 was negatively impacted by a foreign exchange translation loss of $0.4 million.
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FINANCIAL HIGHLIGHTS
(thousands of U.S. dollars except per share amounts
and in accordance with U.S. GAAP)
(unaudited)
--------------------------------------------------------------------
2002 2001
--------------------------------------------------------------------
Q2 Q1 Q4 Q3 Q2
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From Continuing
Operations (1)
Revenues $ 9,730 $10,202 $ 8,916 $ 8,102 $ 8,298
EBITDA (2) (pre R&D and
non-recurring items) 1,930 2,414 1,719 952 1,439
R&D (405) (463) (666) (262) (132)
EDITDA (2) (pre
non-recurring items) 1,525 1,951 1,053 690 1,307
Net Income (Loss)
From Continuing
Operations Before
Non-recurring Items 364 979 552 339 879
Non-recurring Items 167 - - - (3,300)
Discontinued Operations (229) (196) 61 (80) (255)
$ 302 $ 783 $ 613 $ 259 $(2,676)
Basic Income (Loss) Per
Share
From Continuing
Operations Before
Non-recurring Items $ 0.010 $ 0.026 $ 0.015 $ 0.009 $ 0.024
Non-recurring Items 0.004 - - - (0.090)
Discontinued Operations (0.006) (0.006) 0.002 0.002 (0.007)
$ 0.008 $ 0.020 $ 0.017 $ 0.007 $(0.073)
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(1) Commencing with the quarter ended December December: see month. 31, 2001, the results of operations of DRAXIS Pharmaceutica have been reported as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . In the second quarter of 2002 discontinued operations no longer include revenues and expenses directly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to Alertec(R). Information for prior periods has been reclassified to reflect this change. (2) Income (loss) from continuing operations before non-recurring items, depreciation and amortization, interest, income taxes and minority interest. This earnings measure does not have a standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). by U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and therefore may not be comparable to similar measures used by other companies. Such measures should not be construed as the equivalent of net cash flows from operating activities. "Financial results for the first six months of 2002 were in line with our expectations and several milestones were achieved during the quarter, including a BrachySeed launch in the U.S., expansions to key production capacities and further regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. success in the 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. product area," said Dr. Martin Barkin, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of DRAXIS. "As anticipated, operating results at DRAXIMAGE this period came in below their record first quarter performance. The Company's targets for compound annual growth in revenues over the next two to three years remain at approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 50% for the radiopharmaceuticals business and 15% for contract manufacturing. Short term growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. will be significantly affected by the timing of regulatory approvals for new products and the transfer of customers' production to DRAXIS, while also taking into account our annual summer shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down for maintenance." Subsequent to June 30, 2002 the Company announced the retirement of Mr. James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. Doherty
See Rollo. Noun 1. Rolf - Norse chieftain who became the first duke of Normandy (860-931) Hrolf, Rollo H. Henel and Mr. Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. W. Simpson Simp·son , Sir James Young 1811-1870. British obstetrician and a founder of gynecology. He is also known for introducing the use of chloroform as an anesthetic. . On August 14, 2002, DRAXIS was advised that 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]. Corporation will not proceed with the previously announced acquisition of the 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. pharmaceutical sales and marketing division of DRAXIS (Draxis Pharmaceutica). DRAXIS will now consider other strategic options for this division, including divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). . As such options are explored, DRAXIS will continue to manage and operate the Draxis Pharmaceutica division to enhance shareholder value consistent with the Company's strategic focus on its core 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. and specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. contract manufacturing businesses. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Operations -- Decision to retain ownership of Alertec(R) and reclassification of results from this product to continuing operations. -- Underwritten public sale by two corporate shareholders of 4.2 million common shares, representing approximately 11.4% of issued and Company's outstanding shares. -- Renewal of the Company's Shareholder Rights Plan. Radiopharmaceuticals -- Decision to retain ownership of Alertec(R) and reclassification of results from this product to continuing operations. -- Underwritten public sale by two corporate shareholders of 4.2 million common shares, representing approximately 11.4% of issued and Company's outstanding shares. -- Renewal of the Company's Shareholder Rights Plan. Manufacturing -- Decision to retain ownership of Alertec(R) and reclassification of results from this product to continuing operations. -- Underwritten public sale by two corporate shareholders of 4.2 million common shares, representing approximately 11.4% of issued and Company's outstanding shares. -- Renewal of the Company's Shareholder Rights Plan. Corporate -- Decision to retain ownership of Alertec(R) and reclassification of results from this product to continuing operations. -- Underwritten public sale by two corporate shareholders of 4.2 million common shares, representing approximately 11.4% of issued and Company's outstanding shares. -- Renewal of the Company's Shareholder Rights Plan. Interim Financial Report This release includes by reference the second quarter interim financial report incorporating the full Management Discussion & Analysis (MD&A) as well as financial statements under both U.S. and Canadian GAAP. The interim report, including the MD&A and financial statements, has been filed with applicable Canadian and U.S. regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities , is accessible on the Company's website at www.draxis.com in the section "Investors - News Releases 2002" and is available upon request by contacting DRAXIS Investor Relations Investor relations The process by which the corporation communicates with its investors. at 1-877-441-1984 or The Investor Relations Group at (212) 825-3210. Conference Call DRAXIS has scheduled a conference call to discuss second quarter 2002 financial results at 11 a.m. (ET) on August 15, 2002. This call can be accessed by dialing 1-888-303-1331 (no access code required) and will also be webcast live with access through the Company's website at www.draxis.com. The conference call will also be available in archived format on the website for 90 days following the conference call. About DRAXIS Health Inc. DRAXIS Health Inc. is a specialty pharmaceutical company focused on the development, production, marketing and distribution of radiopharmaceuticals (DRAXIMAGE) and the provision of contract pharmaceutical manufacturing services, specializing in liquid and freeze-dried freeze-dry tr.v. freeze-dried, freeze-dry·ing, freeze-dries To preserve (food, for example) by rapid freezing and drying in a high vacuum. Adj. 1. injectables and other sterile products (DRAXIS Pharma Pharma may be an abbreviation for:
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. Financial Tables Attached
DRAXIS HEALTH INC.
Consolidated Statements of Operations
In Accordance with U.S. GAAP
--------------------------------------------------------------------
--------------------------------------------------------------------
(in thousands of U.S. dollars except share related data)
(unaudited)
For the Three Month Period
Ended June 30,
--------------------------------------------------------------------
2002 2001
--------------------------------------------------------------------
REVENUES
Product sales $ 7,652 $ 6,726
Royalty and licensing 2,078 1,572
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9,730 8,298
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EXPENSES
Cost of goods sold 6,010 5,144
Selling, general and
administration 2,150 1,715
Research and
development 405 132
Depreciation and
amortization 698 576
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9,263 7,567
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Operating income 467 731
Interest expense, net (411) (195)
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Income before undernoted 56 536
Income taxes (445) 3,026
Minority interest 30 69
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Income (loss) from
continuing operations 531 (2,421)
Loss from discontinued
operations, net of taxes (229) (255)
--------------------------------------------------------------------
Net income (loss) $ 302 $ (2,676)
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Basic income (loss) per share
from continuing operations $ 0.014 $ (0.066)
from discontinued operations (0.006) (0.007)
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$ 0.008 $ (0.073)
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Diluted income (loss) per share
from continuing operations $ 0.014 $ (0.066)
from discontinued operations (0.006) (0.007)
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$ 0.008 $ (0.073)
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Weighted-average number
of shares outstanding
- basic 37,021,601 36,565,209
- diluted 37,895,729 36,578,848
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--------------------------------------------------------------------
For the Six Month Period
Ended June 30,
--------------------------------------------------------------------
2002 2001
--------------------------------------------------------------------
REVENUES
Product sales $ 15,752 $ 13,655
Royalty and licensing 4,180 3,230
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19,932 16,885
--------------------------------------------------------------------
EXPENSES
Cost of goods sold 11,894 10,775
Selling, general and
administration 4,054 3,293
Research and
development 868 352
Depreciation and
amortization 1,370 1,158
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18,186 15,578
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Operating income 1,746 1,307
Interest expense, net (462) (232)
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Income before undernoted 1,284 1,075
Income taxes (146) 3,141
Minority interest 80 159
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Income (loss) from
continuing operations 1,510 (1,907)
Loss from discontinued
operations, net of taxes (425) (549)
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Net income (loss) $ 1,085 $ (2,456)
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Basic income (loss) per share
from continuing operations $ 0.041 $ (0.052)
from discontinued operations (0.012) (0.015)
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$ 0.029 $ (0.067)
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Diluted income (loss) per share
from continuing operations $ 0.041 $ (0.052)
from discontinued operations (0.012) (0.015)
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$ 0.029 $ (0.067)
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Weighted-average number
of shares outstanding
- basic 36,876,494 36,565,156
- diluted 37,573,415 36,586,221
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See the accompanying notes to the Consolidated Financial
Statements. These interim financial statements should be read in
conjunction with the annual Consolidated Financial Statements.
DRAXIS HEALTH INC.
Consolidated Balance Sheets
In Accordance with U.S. GAAP
--------------------------------------------------------------------
--------------------------------------------------------------------
(in thousands of U.S. dollars)
(unaudited)
June 30, March 31, December 31,
2002 2002 2001
--------------------------------------------------------------------
ASSETS
CURRENT
Cash and cash
equivalents $ 2,146 $ 3,042 $ 5,602
Accounts receivable 8,920 9,738 7,472
Inventories 5,280 5,193 5,272
Prepaid expenses 1,112 814 570
Deferred income taxes, net 673 673 2,917
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18,131 19,460 21,833
Property, plant and
equipment, net 24,679 23,092 22,294
Goodwill, net 2,798 2,874 3,086
Intangible assets, net 6,782 6,722 7,004
Other assets 885 899 995
Deferred income taxes, net 12,753 11,440 9,148
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$ 66,028 $ 64,487 $ 64,360
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LIABILITIES
CURRENT
Bank loan $ 1,350 $ 1,975 $ 1,666
Accounts payable and
accrued liabilities 6,282 6,256 8,125
Current portion of
deferred revenues 5,938 6,108 6,476
Current portion of
long-term debt 999 752 1,446
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14,569 15,091 17,713
Deferred revenues 16,584 16,872 18,139
Long-term debt 8,727 8,985 6,614
Customer deposits 2,312 2,028 1,966
Minority interest 3,396 3,260 3,050
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$ 45,588 $ 46,236 $ 47,482
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SHAREHOLDERS' EQUITY
Common stock, without
par value of unlimited
shares authorized $ 60,597 $ 60,305 $ 59,781
Additional paid in
capital 15,560 15,632 15,476
Employee participation
shares; 2,000,000
shares authorized 140 166 166
Less: loans receivable (140) (166) (166)
Warrants 74 74 74
Deficit (49,784) (50,086) (50,869)
Accumulated other
comprehensive loss (6,007) (7,674) (7,584)
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20,440 18,251 16,878
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$ 66,028 $ 64,487 $ 64,360
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See the accompanying notes to the Consolidated Financial
Statements. These interim financial statements should be read in
conjunction with the annual Consolidated Financial Statements.
DRAXIS HEALTH INC.
Consolidated Statements of Shareholders' Equity
In Accordance with U.S. GAAP
--------------------------------------------------------------------
--------------------------------------------------------------------
(in thousands of U.S. dollars except share related data)
(unaudited)
For the Three Month Period
Ended June 30,
--------------------------------------------------------------------
2002 2001
--------------------------------------------------------------------
Common Stock (Number of
Shares)
Balance, beginning of
period 36,935,434 36,565,102
Issuance of common
shares - -
Exercise of warrants - -
Exercise of options 128,668 3,232
Exercise of employee
participation shares 17,088 -
--------------------------------------------------------------------
Balance, end of period 37,081,190 36,568,334
--------------------------------------------------------------------
Common Stock
Balance, beginning of period $ 60,305 $ 59,698
Issuance of common shares - -
Exercise of warrants - -
Exercise of options 238 -
Exercise of employee
participation shares 54 -
--------------------------------------------------------------------
Balance, end of period $ 60,597 $ 59,698
--------------------------------------------------------------------
Additional Paid In Capital
Balance, beginning of
period $ 15,632 $ 15,476
Stock compensation (72) -
--------------------------------------------------------------------
Balance, end of period $ 15,560 $ 15,476
--------------------------------------------------------------------
Employee Participation
Shares
Balance, beginning of
period $ 166 $ 166
Issuance of employee
participation shares - -
Exercise of employee
participation shares (26) -
--------------------------------------------------------------------
Balance, end of period $ 140 $ 166
--------------------------------------------------------------------
Employee Participation
Shares-Loans Receivable
Balance, beginning of
period $ (166) $ (166)
Issuance of employee
participation shares - -
Exercise of employee
participation shares 26 -
--------------------------------------------------------------------
Balance, end of period $ (140) $ (166)
--------------------------------------------------------------------
Warrants
Balance, beginning of
period $ 74 $ 74
Issuance of warrants - -
Exercise of warrants - -
--------------------------------------------------------------------
Balance, end of period $ 74 $ 74
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Deficit (Note 4 (b) )
Balance, beginning of
period $ (50,086) $ (49,065)
Net income (loss) 302 (2,676)
--------------------------------------------------------------------
Balance, end of period $ (49,784) $ (51,741)
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Accumulated Other
Comprehensive Income
(Loss)
Balance, beginning of
period $ (7,674) $ (6,672)
Other comprehensive
income (loss) 1,667 763
--------------------------------------------------------------------
Balance, end of period (6,007) (5,909)
--------------------------------------------------------------------
Total shareholders'
equity $ 20,440 $ 17,598
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Comprehensive Income (Loss)
Foreign currency
translation adjustments $ 1,667 $ 763
--------------------------------------------------------------------
Other comprehensive
income (loss) 1,667 763
Net Income (loss) 302 (2,676)
--------------------------------------------------------------------
Total comprehensive
income (loss) $ 1,969 $ (1,913)
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--------------------------------------------------------------------
For the Six Month Period
Ended June 30,
--------------------------------------------------------------------
2002 2001
--------------------------------------------------------------------
Common Stock (Number of
Shares)
Balance, beginning of
period 36,613,434 36,565,102
Issuance of common
shares - -
Exercise of warrants - -
Exercise of options 450,668 3,232
Exercise of employee
participation shares 17,088 -
--------------------------------------------------------------------
Balance, end of period 37,081,190 36,568,334
--------------------------------------------------------------------
Common Stock
Balance, beginning of
period $ 59,781 $ 59,698
Issuance of common
shares - -
Exercise of warrants - -
Exercise of options 762 -
Exercise of employee
participation shares 54 -
--------------------------------------------------------------------
Balance, end of period $ 60,597 $ 59,698
--------------------------------------------------------------------
Additional Paid In
Capital
Balance, beginning of
period $ 15,476 $ 15,476
Stock compensation 84 -
--------------------------------------------------------------------
Balance, end of period $ 15,560 $ 15,476
--------------------------------------------------------------------
Employee Participation
Shares
Balance, beginning of
period $ 166 $ 166
Issuance of employee
participation shares - -
Exercise of employee
participation shares (26) -
--------------------------------------------------------------------
Balance, end of period $ 140 $ 166
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Employee Participation
Shares-Loans Receivable
Balance, beginning of
period $ (166) $ (166)
Issuance of employee
participation shares - -
Exercise of employee
participation shares 26 -
--------------------------------------------------------------------
Balance, end of period $ (140) $ (166)
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Warrants
Balance, beginning of
period $ 74 $ 74
Issuance of warrants - -
Exercise of warrants - -
--------------------------------------------------------------------
Balance, end of period $ 74 $ 74
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Deficit (Note 4 (b) )
Balance, beginning of
period $ (50,869) $ (49,285)
Net income (loss) 1,085 (2,456)
--------------------------------------------------------------------
Balance, end of period $ (49,784) $ (51,741)
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Accumulated Other
Comprehensive Income (Loss)
Balance, beginning of
period $ (7,584) $ (5,155)
Other comprehensive
income (loss) 1,577 (754)
--------------------------------------------------------------------
Balance, end of period (6,007) (5,909)
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Total shareholders'
equity $ 20,440 $ 17,598
--------------------------------------------------------------------
Comprehensive Income (Loss)
Foreign currency
translation adjustments $ 1,577 $ (754)
--------------------------------------------------------------------
Other comprehensive
income (loss) 1,577 (754)
Net Income (loss) 1,085 (2,456)
--------------------------------------------------------------------
Total comprehensive
income (loss) $ 2,662 $ (3,210)
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See the accompanying notes to the Consolidated Financial
Statements. These interim financial statements should be read in
conjunction with the annual Consolidated Financial Statements.
DRAXIS HEALTH INC.
Consolidated Statements of Cash Flows
In Accordance with U.S. GAAP
--------------------------------------------------------------------
--------------------------------------------------------------------
(in thousands of U.S. dollars)
(unaudited)
For the Three Month Period
Ended June 30,
--------------------------------------------------------------------
2002 2001
--------------------------------------------------------------------
CASH FLOWS (USED IN)
FROM OPERATING ACTIVITIES
Net income (loss) from
continuing operations $ 531 $ (2,421)
Adjustments to reconcile
net income (loss) from
continuing operations
to net cash (used
in) from operating activities
Amortization of
deferred revenues (1,602) (1,202)
Depreciation and other
amortization 698 576
Stock compensation (71) -
Deferred income taxes (752) 2,815
Minority interest (30) (69)
Other 22 -
Changes in operating
assets and operating
liabilities
Accounts receivable 1,307 1,821
Inventories 172 605
Income taxes (30) 80
Prepaid expenses (250) (60)
Accounts payable and
accrued liabilities (263) 1,063
Current portion of
deferred revenues - -
--------------------------------------------------------------------
(268) 3,208
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CASH FLOWS (USED IN)
FROM INVESTING
ACTIVITIES
Expenditures for
property, plant and
equipment (867) (1,864)
Increase in intangible
assets - -
Increase in deferred
revenues 899 -
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32 (1,864)
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CASH FLOWS (USED IN)
FROM FINANCING
ACTIVITIES
Proceeds from bank loan - 973
Repayment of bank loan (708) -
Proceeds from long-term
debt 26 -
Repayment of long-term
debt - (178)
Proceeds from customer
deposits 178 -
Exercise of warrants
and options 292 -
Issue of common shares
by subsidiary to
minority interest - -
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(212) 795
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Effect of foreign
exchange rate changes
on cash and cash
equivalents 144 160
--------------------------------------------------------------------
Net cash (used in) from
continuing operations (304) 2,299
Net cash used in
discontinued operations (592) (32)
--------------------------------------------------------------------
Net decrease in cash
and cash equivalents (896) 2,267
--------------------------------------------------------------------
Cash and cash
equivalents, beginning
of period 3,042 2,014
--------------------------------------------------------------------
Cash and cash
equivalents, end of
period $ 2,146 $ 4,281
--------------------------------------------------------------------
--------------------------------------------------------------------
Additional Information
Interest paid $ 73 $ 169
Income taxes paid $ 77 $ 153
--------------------------------------------------------------------
--------------------------------------------------------------------
For the Six Month Period
Ended June 30,
--------------------------------------------------------------------
2002 2001
--------------------------------------------------------------------
CASH FLOWS (USED IN) FROM
OPERATING ACTIVITIES
Net income (loss) from
continuing operations $ 1,510 $ (1,907)
Adjustments to reconcile net
income (loss) from continuing
operations to net cash (used
in) from operating activities
Amortization of
deferred revenues (3,158) (2,409)
Depreciation and other
amortization 1,370 1,158
Stock compensation 85 -
Deferred income taxes (845) 2,511
Minority interest (80) (157)
Other 116 (13)
Changes in operating
assets and operating
liabilities
Accounts receivable (545) 551
Inventories 237 1,123
Income taxes (1,328) 480
Prepaid expenses (497) 347
Accounts payable and
accrued liabilities (1,227) 228
Current portion of
deferred revenues - 47
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(4,362) 1,959
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CASH FLOWS (USED IN)
FROM INVESTING
ACTIVITIES
Expenditures for
property, plant and
equipment (2,153) (2,843)
Increase in intangible
assets - (120)
Increase in deferred
revenues 899 409
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(1,254) (2,554)
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CASH FLOWS (USED IN)
FROM FINANCING
ACTIVITIES
Proceeds from bank loan 314 973
Repayment of bank loan (708) -
Proceeds from long-term
debt 1,898 -
Repayment of long-term
debt (172) (418)
Proceeds from customer
deposits 245 -
Exercise of warrants
and options 816 -
Issue of common shares
by subsidiary to
minority interest 267 -
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2,660 555
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Effect of foreign
exchange rate changes
on cash and cash
equivalents 171 62
--------------------------------------------------------------------
Net cash (used in) from
continuing operations (2,785) 22
Net cash used in
discontinued operations (671) (161)
--------------------------------------------------------------------
Net decrease in cash
and cash equivalents (3,456) (139)
--------------------------------------------------------------------
Cash and cash
equivalents, beginning
of period 5,602 4,420
--------------------------------------------------------------------
Cash and cash
equivalents, end of
period $ 2,146 $ 4,281
--------------------------------------------------------------------
--------------------------------------------------------------------
Additional Information
Interest paid $ 151 $ 337
Income taxes paid $ 1,772 $ 222
--------------------------------------------------------------------
--------------------------------------------------------------------
See the accompanying notes to the Consolidated Financial
Statements. These interim financial statements should be read in
conjunction with the annual Consolidated Financial Statements.
DRAXIS HEALTH INC.
Notes to the Consolidated Financial Statements
In Accordance with U.S. GAAP
--------------------------------------------------------------------
--------------------------------------------------------------------
(in thousands of U.S. dollars)
(unaudited)
1. Significant Accounting Policies These consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge have been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP"). The Company has historically reported its consolidated financial results in accordance with Canadian GAAP. Beginning with the period ended March 31, 2001 the Company has begun to report its financial results in accordance with U.S. GAAP. Historical consolidated results have been restated to reflect this change. The functional currency of the Company is the Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents . Effective January January: see month. 1, 2001, the Company adopted the U.S dollar as its reporting currency Reporting Currency The currency used in published reports and financial documents. Notes: All annual and quarterly reports state the currency in which their results are listed. . For the current and prior periods, the financial statements of the Company's operations whose reporting currency is other than the U.S. dollar are translated from such reporting currency to U.S. dollars using the current rate method. Under the current rate method, assets and liabilities are translated at the exchange rates in effect at the balance sheet date. Revenues and expenses, including gains and losses on foreign exchange transactions, are translated at average rates for the period. Where the current rate method is used, the unrealized translation gains and losses on the Company's net investment in these operations, including long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. intercompany advances, are accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. in a separate component of shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. , described in the consolidated balance sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. as accumulated other comprehensive loss. The disclosures contained in these unaudited interim consolidated financial statements do not include all requirements of GAAP for annual financial statements. The unaudited interim consolidated financial statements should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the audited consolidated financial statements for the year ended December 31, 2001. The unaudited interim consolidated financial statements are based upon accounting principles consistent with those used and described in the audited consolidated financial statements for the year ended December 31, 2001, other than as noted herein. The unaudited interim consolidated financial statements reflect all adjustments, consisting only of normal recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. , which are, in the opinion of management, necessary to present fairly the financial position of the Company as of June 30, 2002 and the results of operations and cash flows for the quarter ended June 30, 2002 and 2001. 2. Accounting Change Effective January 1, 2002, the Company adopted the new recommendations of the Statement of Financial Accounting Standards ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ") with respect to Statement No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ". Under the new accounting standard, which can only be applied prospectively, goodwill and other intangible assets with indefinite INDEFINITE. That which is undefined; uncertain. INDEFINITE, NUMBER. A number which may be increased or diminished at pleasure. 2. When a corporation is composed of an indefinite number of persons, any number of them consisting of a majority of those lives are no longer amortized, but are tested for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. upon adoption of the new standard and at least annually thereafter. The Company has assessed its goodwill by applying the prescribed method of comparing the fair value of its reporting unit to its carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. and determined that there has been no goodwill impairment. The Company does not have any intangible assets with indefinite lives. The following is a reconciliation of net income (loss) to reflect the impact of no longer amortizing goodwill effective January 1, 2002.
For the Three Month Period
Ended June 30,
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2002 2001
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Net income (loss), as
reported $ 302 $ (2,676)
Amortization expense on
goodwill - 26
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Net income (loss),
adjusted $ 302 $ (2,650)
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For the Six Month Period
Ended June 30,
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2002 2001
--------------------------------------------------------------------
Net income (loss), as
reported $ 1,085 $ (2,456)
Amortization expense on
goodwill - 52
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Net income (loss),
adjusted $ 1,085 $ (2,404)
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3. Discontinued Operations On January 23, 2002, the Company announced that it had entered into a binding agreement to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. of substantially all of the operations, product rights and other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. and obligations which together constitute the Company's Canadian sales and marketing division ("DRAXIS Pharmaceutica"). On June 4, 2002, the Company announced that it had modified mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. the terms of the proposed sale. On August 14, 2002, the Company was advised that the acquisition would not be completed by the acquirer. The Company is considering other divestiture alternatives with respect to DRAXIS Pharmaceutica. Pursuant to APB Opinion APB opinion A determination by the former Accounting Principles Board regarding the way a certain financial transaction is to be treated for reporting purposes. No. 30, "Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently in·fre·quent adj. 1. Not occurring regularly; occasional or rare: an infrequent guest. 2. Occurring Events and Transactions" ("APB APB See Accounting Principles Board (APB). 30"), the results of operations of DRAXIS Pharmaceutica have been reported as discontinued operations and the consolidated financial statements and notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. for the quarter ended June 30, 2002 and all comparative periods presented have been restated. In the second quarter of 2002, the Company resolved to retain ownership of the Canadian rights to Alertec(R) and continue to market and sell Alertec(R) in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of itself. Accordingly, discontinued operations no longer include revenues and expenses directly attributable to Alertec(R) and information for prior periods has been reclassified to reflect this change. Interest expense directly attributable to license obligations included in the transaction has been allocated to the discontinued operations. The results of discontinued operations, presented in the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. Consolidated Statements of Operations, were as follows:
For the Three Month Period
Ended June 30,
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2002 2001
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Revenues $ 1,501 $ 1,494
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Net loss from
discontinued operations $ (229) $ (255)
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For the Six Month Period
Ended June 30,
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2002 2001
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Revenues $ 2,865 $ 2,773
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Net loss from
discontinued operations $ (425) $ (549)
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4. Shareholders' Equity (a) Stock Option Plan The following is a summary of common shares issuable pursuant to outstanding stock options:
For the Three Month Period
Ended June 30,
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2002 2001
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Balance, beginning of
period 3,371,444 3,157,527
Increase (decrease)
resulting from:
Granted 45,000 85,000
Exercised (128,668) (3,232)
Cancelled (43,500) -
Expired - (87,750)
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Balance, end of period 3,244,276 3,151,545
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For the Six Month Period
Ended June 30,
--------------------------------------------------------------------
2002 2001
--------------------------------------------------------------------
Balance, beginning of
period 3,358,444 3,079,527
Increase (decrease)
resulting from:
Granted 380,000 163,000
Exercised (450,668) (3,232)
Cancelled (43,500) -
Expired - (87,750)
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Balance, end of period 3,244,276 3,151,545
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(b) Restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of Prior Years During 2001, the Company discovered that the income tax effect of certain capital transactions that occurred between 1991 and 1996 had been recorded as deferred income tax assets rather than being charged to shareholders' equity. Accordingly, the consolidated balance sheets as at December 31, 2001 and prior periods reflect the restatement to reduce non-current deferred income tax assets, additional paid in capital and accumulated other comprehensive loss by $2,954, $2,701 and $1,076, respectively and to increase deficit by $1,329. 5. Segmented Information Industry Segmentation For purposes of operating decision-making decision-making, n the process of coming to a conclusion or making a judgment. decision-making, evidence-based, n a type of informal decision-making that combines clinical expertise, patient concerns, and evidence gathered from and assessing performance, management considers that it operates in three segments: Radiopharmaceuticals, Manufacturing, and Corporate and Other.
For the Three Month Period
Ended June 30,
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2002 2001
--------------------------------------------------------------------
PRODUCT SALES REVENUES
Radiopharmaceuticals $ 1,989 $ 1,729
Manufacturing 5,943 5,061
Corporate and Other (280) (64)
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$ 7,652 $ 6,726
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ROYALTY AND LICENSING
REVENUES
Radiopharmaceuticals $ 112 $ 27
Manufacturing - -
Corporate and Other 1,966 1,545
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$ 2,078 $ 1,572
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TOTAL REVENUES
Radiopharmaceuticals $ 2,101 $ 1,756
Manufacturing 5,943 5,061
Corporate and Other 1,686 1,481
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$ 9,730 $ 8,298
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SEGMENT INCOME(1)
Radiopharmaceuticals $ - $ 503
Manufacturing 194 130
Corporate and Other 971 674
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$ 1,165 $ 1,307
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DEPRECIATION AND
AMORTIZATION
Radiopharmaceuticals $ 177 $ 144
Manufacturing 288 200
Corporate and Other 233 232
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$ 698 $ 576
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OPERATING INCOME (LOSS)(2)
Radiopharmaceuticals $ (177) $ 359
Manufacturing (94) (70)
Corporate and Other 738 442
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$ 467 $ 731
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For the Six Month Period
Ended June 30,
--------------------------------------------------------------------
2002 2001
--------------------------------------------------------------------
PRODUCT SALES REVENUES
Radiopharmaceuticals $ 4,981 $ 3,364
Manufacturing 11,017 10,250
Corporate and Other (246) 41
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$ 15,752 $ 13,655
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ROYALTY AND LICENSING
REVENUES
Radiopharmaceuticals $ 196 $ 42
Manufacturing - -
Corporate and Other 3,984 3,188
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$ 4,180 $ 3,230
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TOTAL REVENUES
Radiopharmaceuticals $ 5,177 $ 3,406
Manufacturing 11,017 10,250
Corporate and Other 3,738 3,229
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$ 19,932 $ 16,885
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SEGMENT INCOME(1)
Radiopharmaceuticals $ 888 $ 825
Manufacturing 328 185
Corporate and Other 1,900 1,455
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$ 3,116 $ 2,465
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DEPRECIATION AND
AMORTIZATION
Radiopharmaceuticals $ 345 $ 284
Manufacturing 564 396
Corporate and Other 461 478
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$ 1,370 $ 1,158
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OPERATING INCOME
(LOSS)(2)
Radiopharmaceuticals $ 543 $ 541
Manufacturing (236) (211)
Corporate and Other 1,439 977
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$ 1,746 $ 1,307
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June 30, March 31, December 31,
2002 2002 2001
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IDENTIFIABLE ASSETS
Radiopharmaceuticals $ 11,610 $ 10,748 $ 13,558
Manufacturing 28,152 28,538 24,906
Corporate and Other 26,266 25,201 25,896
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$ 66,028 $ 64,487 $ 64,360
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(1) Segment income from continuing operations before depreciation and amortization, interest, income taxes and minority interest. (2) Segment income (loss) from continuing operations before interest, income taxes and minority interest. Geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. Segmentation
For the Three Month Period
Ended June 30,
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2002 2001
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REVENUES(3)
Canada $ 6,171 $ 5,391
United States 3,497 2,907
Other 62 -
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$ 9,730 $ 8,298
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For the Six Month Period
Ended June 30,
--------------------------------------------------------------------
2002 2001
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REVENUES(3)
Canada $ 12,233 $ 11,164
United States 7,581 5,721
Other 118 -
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$ 19,932 $ 16,885
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June 30, March 31, December 31,
2002 2002 2001
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LONG-LIVED ASSETS(4)
Canada $ 34,259 $ 32,688 $ 32,384
United States - - -
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$ 34,259 $ 32,688 $ 32,384
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(3) Revenues are attributable to countries based upon the location of the customer. (4) Represents property, plant and equipment, goodwill and intangible assets that are identified with each geographic region. 6. Comparative Information The Company has reclassified certain prior period's information to conform with the current presentation format. |
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