DRAXIS Health Reports Second Quarter Results.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. 13, 2001 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:
TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :DAX.) Net Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of US$0.02 per Share Year to Date 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) Up 18% On Revenue Growth of 12% DRAXIS Health Inc. (NASDAQ:DRAX)(TSE:DAX.) today reported operating results for the second quarter ended June June: see month. 30, 2001. Revenues for the quarter increased 4% to US$9.8 million from US$9.4 million in the second quarter of last year and revenues year to date increased 12% to US$19.7 million from US$17.6 million in 2000. Operating profitability for the quarter, or EBITDA (pre R&D), was US$1.6 million, an increase of 23% over the second quarter of 2000. Net income for the quarter, before a non-cash accounting charge against deferred income tax assets resulting from declining 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. corporate income tax rates, was US$624,000 or US$0.02 per share.
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FINANCIAL HIGHLIGHTS1
(thousands of U.S. dollars except per share amounts and in accordance
with U.S. GAAP)
(unaudited)
---------------------------------------------
2001 2000
---------------------------------------------
Q2 Q1 Q4 Q3 Q2
---------------------------------------------
Revenues $ 9,792 $ 9,866 $ 9,879 $ 8,027 $ 9,413
-------- -------- -------- -------- --------
EBITDA2 (pre-R&D) 1,633 1,418 1,213 758 1,329
R&D (359) (388) (545) (525) (565)
-------- -------- -------- -------- --------
EDITDA2 1,274 1,030 668 233 764
-------- -------- -------- -------- --------
Net Income (Loss)
Before Revaluation
of Tax Assets 624 220 (418) (421) 168
Revaluation of
Tax Assets (3,300) - - - -
-------- -------- -------- -------- --------
$(2,676) $ 220 $ (418) $ (421) $ 168
-------- -------- -------- -------- --------
Net Income (Loss) Per Share
Before Revaluation
of Tax Assets $ 0.02 $ 0.01 $ (0.01) $ (0.01) $ 0.00
Revaluation of
Tax Assets (0.09) - - - -
-------- -------- -------- -------- --------
$ (0.07) $ 0.01 $ (0.01) $ (0.01) $ 0.00
-------- -------- -------- -------- --------
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1 Beginning with the first quarter of 2001 the Company has adopted
U.S. GAAP and U.S. dollars for financial reporting purposes.
2 Earnings before non-recurring items, depreciation and amortization,
financial income (expense), other income, income taxes and
non-controlling interest.
"The solid revenues generated through the first half, together with continuing positive operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before , indicate that we are on track toward achieving our targets for the year, both for revenue growth and positive net income 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 ," stated 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. "These key results continue to demonstrate that the Company has established a solid base of operating profitability as the foundation for future development." "Our 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. business, DRAXIMAGE Inc., completed the expansion of its manufacturing facilities during the quarter and this new operation was commissioned in July July: see month. ," continued Dr. Barkin. "New production systems incorporating advanced robotics robotics, science and technology of general purpose, programmable machine systems. Contrary to the popular fiction image of robots as ambulatory machines of human appearance capable of performing almost any task, most robotic systems are anchored to fixed positions , computerized computerized adapted for analysis, storage and retrieval on a computer. computerized axial tomography see computed tomography. process controls and DRAXIS-designed equipment are currently being installed in the new facilities to meet the growing demand for our radiopharmaceutical products in the 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. . During the quarter, the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. approved our palladium-103 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. implant implant /im·plant/ (im-plant´) to insert or to graft (tissue, or inert or radioactive material) into intact tissues or a body cavity. , BrachySeed(TM) Pd-103, but we currently await AWAIT, crim. law. Seems to signify what is now understood by lying in wait, or way-laying. final clearance CLEARANCE, com. law. The name of a certificate given by the collector of a port, in which is stated the master or commander (naming him) of a ship or vessel named and described, bound for a port, named, and having on board goods described, has entered and cleared his ship or vessel from the U.S. Nuclear Regulatory Commission Nuclear Regulatory Commission (NRC), an independent U.S. government commission, created by the Energy Reorganization Act of 1974 and charged with licensing and regulating civilian use of nuclear energy to protect the public and the environment. before introducing the product to the U.S. market. Subsequent to the quarter end both Health Canada Health Canada (French: Santé Canada) is the department of the government of Canada with responsibility for national public health. Health Canada's goal is to improve Canadian life by improving Canadian longevity, lifestyle and use of public healthcare. and the Canadian Nuclear Safety Commission The Canadian Nuclear Safety Commission (CNSC), previously known as the "Atomic Energy Control Board" (AECB), is best described as the nuclear energy and materials watchdog in Canada. cleared this product for the Canadian market." "Revenues in our contract pharmaceutical manufacturing business, DRAXIS Pharma Pharma may be an abbreviation for:
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. relationship with GlaxoSmithKline GlaxoSmithKline plc (LSE: GSK NYSE: GSK) is a British based pharmaceutical, biological, and healthcare company. GSK is a research-based company with a wide portfolio of pharmaceutical products covering anti-infectives, central nervous system (CNS), respiratory, announced earlier this year. " Dr. Barkin continued: "Our Canadian Pharmaceuticals business continues to demonstrate a growing and consistent contribution to profits. During the second quarter, Notices of Compliance were received from Health Canada for Hectorol Hectorol™ Endocrinology An agent for managing 2º hyperparathyroidism linked to ESRD, which may used in predialysis Pts (TM) for the treatment of bone disease and disturbed Disturbed is a rock band from Chicago, Illinois. The group was formed in 1996 when musicians Dan Donegan, Steve "Fuzz" Kmak, and Mike Wengren hired singer David Draiman in Chicago, Illinois. calcium metabolism calcium metabolism The constellation of ionic checks & balances that maintain Ca2+ homeostasis in the blood and tissues. See Calcium. as well as for Levulan Levulan photodynamic therapy is a treatment method for certain skin conditions developed by Dusa Pharmaceuticals. The active ingredient is δ-aminolevulinic acid (ALA). Kerastick(R) Photodynamic Therapy photodynamic therapy n. A type of phototherapy in which a nontoxic light-sensitive compound that has been injected into a patient is exposed selectively to light, whereupon it becomes toxic to targeted malignant and other diseased cells. (PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT ) for the treatment of Actinic actinic /ac·tin·ic/ (ak-tin´ik) producing chemical action; said of rays of light beyond the violet end of the spectrum. ac·tin·ic adj. Keratoses, or precancerous precancerous /pre·can·cer·ous/ (-kan´ser-us) pertaining to a pathologic process that tends to become malignant. pre·can·cer·ous adj. skin lesions Skin Lesions Definition A skin lesion is a superficial growth or patch of the skin that does not resemble the area surrounding it. Description Skin lesions can be grouped into two categories: primary and secondary. , of the face and scalp. Plans are being finalized See finalization. for the launch of these products in Canada." Financial Results 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: revenues of US$9.8 million for the current quarter rose 4.0% from US$9.4 million in the second quarter of 2000. Year to date revenues of US$19.7 million are 11.8% above the six-month revenues of US$17.6 million for the prior year, due largely to the continuing growth trend in the manufacturing business. EBITDA (pre R&D) was US$1.6 million for the second quarter and US$3.1 million for the first six months of 2001, representing increases over the 2000 periods of 22.9% for the quarter and 17.7% for the year to date. As in previous years, third quarter results are expected to decline somewhat from the first two quarters due to the regularly scheduled summer shut down for maintenance. Net income, prior to the revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of income tax assets, of US$624,000 or US$0.02 per share, for the second quarter of 2001 compares with US$168,000 or US$0.00 per share for the same period in 2000. In the second quarter of 2001 the Company recorded a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of US$3.3 million, or US$0.09 per share, to reduce the 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. of its deferred income tax assets as a result of declining Canadian federal and provincial Provincial has several meanings and may refer to:
adj. 1. Almost exact or correct: the approximate time of the accident. 2. 31% following full implementation of the reductions over the next three to four years. Selling, general and administration expenses of US$2.5 million in the second quarter of 2001 were largely unchanged from the same quarter in 2000 but, as a percentage of revenue, declined to 25.2% from 26.5%. Expenditures for research and development declined to US$359,000 in the second quarter of 2001 from US$565,000 in 2000. Net financial expense in the quarter increased to US$293,000 from US$152,000 in the year earlier quarter largely due to changes in foreign exchange rates. 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 GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (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 'Investors' section on the "News Release" page for 2001 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. DRAXIS has scheduled a conference call to discuss these second quarter 2001 financial results at 11:00 a.m. ET on August 13, 2001. This call will be webcast live with access through the Company's website at www.draxis.com, and will also be available in archived format on the website for 30 days following the conference call. About DRAXIS Health Inc. DRAXIS Health Inc. is a diversified diversified (di·verˑ·s specialty pharmaceutical company with operations 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), contract manufacturing (DRAXIS Pharma), and pharmaceutical sales and marketing (DRAXIS Pharmaceutica). 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 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. 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 Balance Sheets
In Accordance with U.S. GAAP
----------------------------------------------------------------------
----------------------------------------------------------------------
(in thousands of U.S. dollars)
(unaudited)
June 30, December 31,
-------------------------
2001 2000
---- ----
ASSETS
CURRENT
Cash and cash equivalents $ 4,281 $ 4,420
Accounts receivable 6,234 6,913
Inventories 5,038 6,269
Income taxes recoverable 249 742
Prepaid expenses 1,977 2,362
Deferred income taxes 718 804
----------------------------------------------------------------------
18,497 21,510
Fixed assets 21,481 19,513
Goodwill 3,703 4,252
Patents, licenses and other deferred charges 9,388 8,650
Deferred income taxes 13,803 16,336
----------------------------------------------------------------------
$ 66,872 $ 70,261
----------------------------------------------------------------------
----------------------------------------------------------------------
LIABILITIES
CURRENT
Bank loan $ 2,300 $ 1,335
Accounts payable and accrued charges 5,785 5,478
Current portion of deferred revenues 4,982 4,901
Current portion of long-term debt 1,249 1,268
----------------------------------------------------------------------
14,316 12,982
Deferred revenues 19,514 21,363
Long-term debt 8,065 8,622
Non-controlling interest in subsidiary company 3,318 3,532
----------------------------------------------------------------------
45,213 46,499
----------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Common stock 59,698 59,698
Employee participation shares 166 166
Less: loans receivable (166) (166)
Warrants 74 74
Contributed surplus 18,177 18,177
Deficit (50,412) (47,956)
Cumulative translation adjustment (5,878) (6,231)
----------------------------------------------------------------------
21,659 23,762
----------------------------------------------------------------------
$ 66,872 $ 70,261
----------------------------------------------------------------------
----------------------------------------------------------------------
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 Operations and Deficit
In Accordance with U.S. GAAP
----------------------------------------------------------------------
----------------------------------------------------------------------
(in thousands of U.S. dollars except share related data)
(unaudited)
For the Three For the Six
Month Period Month Period
Ended June 30, Ended June 30,
----------------------- ------------------------
2001 2000 2001 2000
----------- ----------- ------------ -----------
$ 9,792 $ 9,413 REVENUES $ 19,658 $ 17,579
EXPENSES
5,693 5,594 Cost of sales 11,768 9,933
Selling, general
2,466 2,490 and administration 4,839 5,053
- 434 Restructuring charges - 434
359 565 Research and development 747 868
Depreciation and
810 805 amortization 1,621 1,579
----------------------------------------------------------------------
464 (475) Income (loss) from operations 683 (288)
Financial
56 123 Interest income 112 166
(283) (328) Financing expense (542) (658)
(66) 53 Foreign exchange gain(loss) (1) 21
- 283 Other income - 283
----------------------------------------------------------------------
Income (loss) before
171 (344) undernoted 252 (476)
Income tax (provision)
(2,916) 425 recovery (2,867) 775
69 87 Non-controlling interest 159 102
----------------------------------------------------------------------
(Loss) income before cumulative
(2,676) 168 effect of accounting change(2,456) 401
Cumulative effect of
- - accounting change - (19,900)
----------------------------------------------------------------------
$ (2,676) $ 168 Net (loss) income $ (2,456) $ (19,499)
----------------------------------------------------------------------
----------------------------------------------------------------------
Net (loss) income per share
- before cumulative effect of
$ (0.07) $ - accounting change $ (0.07) $ 0.01
- cumulative effect of
$ - $ - accounting change $ - $ (0.55)
----------------------------------------------------------------------
$ (0.07) $ - - basic $ (0.07) $ (0.54)
$ (0.07) $ - - fully diluted $ (0.07) $ (0.54)
----------------------------------------------------------------------
----------------------------------------------------------------------
Weighted-average number
of shares outstanding
36,565,209 36,408,792 - basic 36,565,156 36,098,555
36,578,848 36,486,233 - fully diluted 36,586,221 36,168,660
----------------------------------------------------------------------
----------------------------------------------------------------------
Deficit, beginning
$ (47,736) $ (47,158) of period $ (47,956) $ (27,491)
(2,676) 168 Net (loss) income (2,456) (19,499)
----------------------------------------------------------------------
$ (50,412) $ (46,990) Deficit, end of period $ (50,412) $ (46,990)
----------------------------------------------------------------------
----------------------------------------------------------------------
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 For the Six
Month Period Month Period
Ended June 30, Ended June 30,
----------------------- ------------------------
2001 2000 2001 2000
----------- ----------- ------------ -----------
CASH FLOWS (USED IN) FROM
OPERATING ACTIVITIES
$ (2,676) $ 168 Net (loss) income $ (2,456) $ (19,499)
Adjustments to reconcile
net income (loss) to cash flow
(used in) from
operating activities
Amortization of
(1,202) (1,010) deferred revenues (2,409) (1,815)
238 227 Amortization of goodwill 478 424
Depreciation and
572 578 other amortization 1,143 1,155
- (283) Other income - (283)
2,705 (547) Deferred income taxes 2,237 (1,024)
(69) (87) Non-controlling interest (157) (102)
Cumulative effect
- - of accounting change - 19,900
98 62 Other 186 212
Changes in current assets
and current liabilities
affecting cash flows
from operations
1,821 (2,037) Accounts receivable 551 (2,073)
605 (15) Inventories 1,123 (1,290)
80 (108) Income taxes 480 (53)
(60) (298) Prepaid expenses 347 (512)
Accounts payable and
1,063 (393) accrued charges 228 (970)
Current portion of
- 1,690 deferred revenues 47 1,690
----------------------------------------------------------------------
3,174 (2,053) 1,798 (4,240)
----------------------------------------------------------------------
CASH FLOWS (USED IN) FROM
INVESTING ACTIVITIES
(1,864) (171) Purchase of fixed assets (2,843) (507)
Increase in other
- - deferred charges, net (120) -
Proceeds from disposition
- 613 of product rights, net - 613
- 6,517 Increase in deferred revenues 409 6,517
----------------------------------------------------------------------
(1,864) 6,959 (2,554) 6,623
----------------------------------------------------------------------
CASH FLOWS (USED IN) FROM
FINANCING ACTIVITIES
973 1,146 Proceeds from bank loan 973 1,146
- (2,302) Repayment of bank loan - (2,476)
(178) (4,003) Repayment of long-term debt (418) (4,176)
Exercise of warrants
- 143 and options - 1,931
Issue of common shares by
subsidiary to
- 57 non-controlling interest - 5,375
----------------------------------------------------------------------
795 (4,959) 555 1,800
----------------------------------------------------------------------
Effect of foreign exchange rate
changes on cash and
161 87 cash equivalents 62 162
Net (decrease) increase in cash
2,267 34 and cash equivalents (139) 4,345
Cash and cash equivalents,
2,014 6,327 beginning of period 4,420 2,016
----------------------------------------------------------------------
Cash and cash equivalents,
$ 4,281 $ 6,361 end of period $ 4,281 $ 6,361
----------------------------------------------------------------------
----------------------------------------------------------------------
Additional Information
$ 169 $ 224 Interest paid $ 337 $ 409
$ 152 $ 104 Income taxes paid $ 222 $ 104
----------------------------------------------------------------------
----------------------------------------------------------------------
See the accompanying notes to the Consolidated Financial
Statements.
These interim financial statements should be read in conjunction
with the annual Consolidated Financial Statements.
1. Summary of 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 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 sheet 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 cumulative translation adjustment. 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 annual consolidated financial statements for the year ended December December: see month. 31, 2000. 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, 2000, 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, 2001 and the results of operations and cash flows for the six months ended June 30, 2001 and 2000. 2. Change in Accounting Policy Effective January 1, 2000, the Company changed its policy with respect to revenue recognition of non-refundable fees received in connection with collaboration Working together on a project. See collaborative software. agreements whereby such fees are deferred and recognized as revenue rateably over the contract period. This new policy is consistent with the guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. contained in the U.S. Securities and Exchange Commission Staff Accounting Bulletin #101, "Revenue Recognition in Financial Statements", dated December 1999. $19,900, representing the cumulative effect of the change in policy, was charged to earnings in 2000, prior years are not restated. 3. Capital Stock As at June 30, 2001, the Company had outstanding 36,568,334 common shares, 470,000 Series C employee participation shares, 125,000 warrants and 3,151,545 options to acquire the Company's common shares. 4. 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 four separate businesses: Radiopharmaceuticals, Manufacturing, Canadian Pharmaceuticals and Companion Animal Health.
For the Three For the Six
Month Period Month Period
Ended June 30, Ended June 30,
----------------------- ------------------------
2001 2000 2001 2000
----------- ----------- ------------ -----------
REVENUES
$ 1,756 $ 1,770 Radiopharmaceuticals $ 3,406 $ 3,415
5,061 4,393 Manufacturing 10,250 7,872
2,142 2,845 Canadian Pharmaceuticals 4,072 5,268
1,085 1,135 Companion Animal Health 2,266 2,226
(252) (730) Intercompany (336) (1,202)
----------------------------------------------------------------------
$ 9,792 $ 9,413 $ 19,658 $ 17,579
----------------------------------------------------------------------
SEGMENT INCOME (LOSS)1
$ 503 $ 180 Radiopharmaceuticals $ 825 $ 665
130 19 Manufacturing 185 23
490 40 Canadian Pharmaceuticals 961 675
1,091 1,057 Companion Animal Health 2,250 2,038
(51) (45) Intercompany (59) (34)
(889) (921) Corporate (1,858) (2,076)
----------------------------------------------------------------------
$ 1,274 $ 330 $ 2,304 $ 1,291
----------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION
$ 144 $ 136 Radiopharmaceuticals $ 284 $ 273
200 181 Manufacturing 396 364
455 469 Canadian Pharmaceuticals 914 894
- 7 Companion Animal Health - 15
11 12 Corporate 27 33
----------------------------------------------------------------------
$ 810 $ 805 $ 1,621 $ 1,579
----------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
$ 359 $ 44 Radiopharmaceuticals $ 541 $ 392
(70) (162) Manufacturing (211) (341)
35 (429) Canadian Pharmaceuticals 47 (219)
1,091 1,050 Companion Animal Health 2,250 2,023
(51) (45) Intercompany (59) (34)
(900) (933) Corporate (1,885) (2,109)
----------------------------------------------------------------------
$ 464 $ (475) $ 683 $ (288)
----------------------------------------------------------------------
----------------------------------------------------------------------
June 30,December 31,
-----------------------
2001 2000
---- ----
IDENTIFIABLE ASSETS
Radiopharmaceuticals $ 12,964 $ 7,652
Manufacturing 24,057 25,717
Canadian Pharmaceuticals 24,606 24,718
Companion Animal Health 771 4,233
Corporate 4,473 7,941
----------------------------------------------------------------------
$ 66,872 $ 70,261
----------------------------------------------------------------------
----------------------------------------------------------------------
1Segment income (loss) before depreciation and amortization,
financial income (expense), other income, income taxes and
non-controlling interest.
Geographic Segmentation
For the Three For the Six
Month Period Month Period
Ended June 30, Ended June 30,
----------------------- ------------------------
2001 2000 2001 2000
----------- ----------- ------------ -----------
REVENUES1
$ 6,885 $ 6,720 Canada $ 13,952 $ 12,379
2,907 2,693 United States 5,706 5,200
----------------------------------------------------------------------
$ 9,792 $ 9,413 $ 19,658 $ 17,579
----------------------------------------------------------------------
----------------------------------------------------------------------
-----------------------
June 30,December 31,
-----------------------
2001 2000
---- ----
IDENTIFIABLE ASSETS
Canada $ 66,100 $ 66,028
United States 772 4,233
----------------------------------------------------------------------
$ 66,872 $ 70,261
----------------------------------------------------------------------
----------------------------------------------------------------------
1Revenues are attributable to countries based upon
the location of the customer.
5. Comparative Information
The Company has reclassified prior period's information to conform
with the current presentation format.
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