Patheon Fiscal 2012 Second Quarter Earnings June 13, 2012 Exhibit 99.2 |
1 Forward-Looking Statements This presentation contains forward-looking statements or information which reflect our expectations regarding possible events, conditions, our future growth, results of operations, performance, and business prospects and opportunities. All statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements necessarily involve significant known and unknown risks, assumptions and uncertainties that may cause our actual results in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks are described in our 2011 Form 10-K, and our other filings with the U.S. Securities and Exchange Commission and with the Canadian Securities Administrators. Accordingly, you are cautioned not to place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof, and except as required by law, we assume no obligation to update or revise them to reflect new events or circumstances. Use of Non-GAAP Financial Measures These slides contain references to the following non-GAAP measures: (1) “Adjusted EBITDA” which is income (loss) before discontinued operations before repositioning expenses, interest expense, foreign exchange losses reclassified from other comprehensive income, refinancing expenses, gains and losses on sale of fixed assets, gain on extinguishment of debt, income taxes, asset impairment charge, depreciation and amortization and other income and expenses; (2) “Adjusted EBITDA Excluding Certain Items,” which is “Adjusted EBITDA” excluding the benefit from the contract cancellation recorded in fiscal 2011 and the consulting fees associated with the strategic initiatives; and (3) “Adjusted Revenue” and “Adjusted Gross Profit,” which each exclude the benefit from the contract cancellation recorded in fiscal 2011. Since Adjusted EBITDA, Adjusted EBITDA before certain items, Adjusted Revenue and Adjusted Gross Profit are non-GAAP measures that do not have a standardized meaning, they may not be comparable to similar measures presented by other issuers. You are cautioned that these non-GAAP measures should not be substituted for their comparable GAAP measures as indicators of performance. We have included these measures because we believe that this information is used by certain investors to assess our financial performance, before non-cash charges and certain costs that we do not believe are reflective of our underlying business. In addition, Adjusted EBITDA is used by management as an internal measure of profitability. Reconciliations of these non-GAAP measures to the closest U.S. GAAP measures are included in the Appendix to this presentation. |
2 • Highlights • Financial results • Transformation update • Conclusion Agenda |
Second Quarter Highlights 18.9% revenue growth* Significant increase in gross profit* * Excluding the $17.4M benefit from the contract cancellation recorded in the second quarter of fiscal 2011 Raising revenue guidance - in excess of $725M Transformation on track 3 |
4 100 120 140 160 180 200 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Revenue Overview 18.9% yr-yr revenue growth excluding the benefit from contract cancellation Revenue (U.S. $ in millions) Adjusted Revenue (U.S. $ in millions) 100 120 140 160 180 200 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 |
5 10 15 20 25 30 35 40 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Gross Profit Overview Gross Profit (U.S. $ in millions) 10 15 20 25 30 35 40 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Gross profit growth from $13M to $34M excluding the benefit from contract cancellation Adjusted Gross Profit (U.S. $ in millions) |
6 Adjusted EBITDA Overview -15 -5 5 15 25 35 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Adjusted EBITDA (U.S. $ in millions) Adjusted EBITDA Excluding Certain Items (U.S. $ in millions) -15 -5 5 15 25 35 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 |
7 Summary Financial Results Three months ended April 30, Statement of Operations 2012 2011 (in millions of U.S. dollars) $ $ Revenues 181.5 170.0 Gross profit 34.0 30.4 Selling, general and administrative expenses 34.7 24.8 Operating (loss) income (64.6) 4.7 Loss before discontinued operations (79.6) (10.3) Adjusted EBITDA 9.7 12.9 Balance Sheet Q2 -- 2012 Q4 -- 2011 Cash 19.6 33.4 Total debt (LT and ST) 314.8 287.3 Undrawn lines of credit 60.1 94.9 |
8 Strengthen core operations Sell business differently Enter logical adjacencies Drive industry consolidation Strategy |
9 Mindsets & Behaviors Infrastructure Leveraging global network Swindon announcement Clinical packaging Puerto Rico consolidation on track Improving resource coordination Lab design and work flow Expanding operational capacity Italy pre-filled syringe line G&A and procurement Coordinated vendor management and leverage purchase spend Global pricing Working capital Consulting spend minimal in Q3 Operating efficiencies have improved capacity Strengthen core operations Footprint 9 |
Value-drive solutions for our customers: Expanded CMC and Scientific Consulting offerings to position the brand differently: Patheon Certified Consultants Sell business differently 10 |
11 Leverages expertise of both companies Patheon – sales and marketing reach and largest development pipeline ProCaps – softgel related technology, formulation and manufacturing expertise, and infrastructure Launched P-Gels in May Enter logical adjacencies |
Summary • Underlying business is strong with growing revenues and improving margins • Transformation activities are on track • Balance sheet and liquidity are good • Raising top-line guidance 12 |
13 Thank You |
Appendix Adjusted Revenue (unaudited) Q211 Q311 Q411 Q112 Q212 (in millions of U.S. dollars) $ $ $ $ $ Revenues 170.0 172.7 181.6 153.9 181.5 Contract cancellation (17.4) - - - - Adjusted Revenue 152.6 172.7 181.6 153.9 181.5 Adjusted Gross Profit (unaudited) Q211 Q311 Q411 Q112 Q212 (in millions of U.S. dollars) $ $ $ $ $ Gross Profit 30.4 25.8 33.5 14.4 34.0 Contract cancellation (17.4) - - - - Adjusted Gross Profit 13.0 25.8 33.5 14.4 34.0 14 |
15 Adjusted EBITDA and Adjusted EBITDA Excluding Certain Items (unaudited) Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 (in millions of U.S. dollars) $ $ $ $ $ Loss before discontinued operations (10.3) 0.6 (9.8) (19.3) (79.6) Depreciation and amortization 13.5 12.6 12.2 10.6 10.8 Repositioning expenses 0.7 1.9 3.5 0.8 6.0 Interest expense, net 6.4 6.3 6.6 6.5 6.5 Impairment charge - - - - 57.9 Gain (loss) on sale of fixed assets 0.2 (0.1) 0.1 - - Benefit from (provision for) income taxes 2.1 (4.7) 1.0 (7.7) 8.0 Other income (expense), net 0.3 (6.3) 0.9 (0.1) 0.1 Adjusted EBITDA 12.9 10.3 14.5 (9.2) 9.7 Contract cancellation (17.4) - - - - Consulting - 2.5 6.5 6.3 6.0 Adjusted EBITDA Excluding Certain Items (4.5) 12.8 21.0 (2.9) 15.7 Appendix |