EXHIBIT 99.2
KAMADA LTD.
CONSOLIDATED FINANCIAL STATEMENTS AS OF
SEPTEMBER 30, 2013
TABLE OF CONTENTS
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KAMADA LTD.
CONSOLIDATED BALANCE SHEETS
As of September 30, | As of December 31, | |||||||||||
2013 | 2012 | 2012 | ||||||||||
Unaudited | Audited | |||||||||||
In thousands | ||||||||||||
Current Assets | ||||||||||||
Cash and cash equivalents | $ | 71,232 | $ | 15,470 | $ | 16,866 | ||||||
Short-term investments | 4,707 | 18,040 | 16,929 | |||||||||
Trade receivables | 17,285 | 12,979 | 13,861 | |||||||||
Other accounts receivables | 2,532 | 1,849 | 1,661 | |||||||||
Inventories | 22,279 | 19,040 | 20,513 | |||||||||
118,035 | 67,378 | 69,830 | ||||||||||
Non-Current Assets | ||||||||||||
Long-term inventories | 165 | 394 | 238 | |||||||||
Property, plant and equipment, net | 20,951 | 18,245 | 18,827 | |||||||||
Other long-term assets | 177 | 153 | 219 | |||||||||
21,293 | 18,792 | 19,284 | ||||||||||
139,328 | 86,170 | 89,114 | ||||||||||
Current Liabilities | ||||||||||||
Short term credit and Current maturities of convertible debentures | 5,658 | 12 | 5,370 | |||||||||
Trade payables | 9,124 | 12,618 | 12,220 | |||||||||
Other accounts payables | 4,312 | 3,067 | 3,413 | |||||||||
Deferred revenues | 7,603 | 8,314 | 8,176 | |||||||||
26,697 | 24,011 | 29,179 | ||||||||||
Non-Current Liabilities | ||||||||||||
Loans from banks and others | - | 3 | - | |||||||||
Warrants | - | 19 | 23 | |||||||||
Convertible debentures | 20,653 | 22,714 | 18,747 | |||||||||
Employee benefit liabilities, net | 866 | *)578 | 718 | |||||||||
Deferred revenues | 9,489 | 14,415 | 12,054 | |||||||||
31,008 | 37,729 | 31,542 | ||||||||||
Equity | ||||||||||||
Share capital | 9,010 | 7,165 | 7,204 | |||||||||
Share premium | 149,219 | 95,943 | 96,874 | |||||||||
Conversion option in convertible debentures | 3,789 | 3,794 | 3,794 | |||||||||
Capital reserve due to translation to presentation currency | (3,490 | ) | (3,490 | ) | (3,490 | ) | ||||||
Capital reserve from hedges | 185 | (99 | ) | 229 | ||||||||
Other capital reserves | 4,709 | *)4,666 | 4,473 | |||||||||
Accumulated deficit | (81,799 | ) | *)(83,549 | ) | (80,691 | ) | ||||||
81,623 | 24,430 | 28,393 | ||||||||||
$ | 139,328 | $ | 86,170 | $ | 89,114 |
*) Retroactive adjustment, see note 2b'.
The accompanying Notes are an integral part of the Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the 9 months period ended September 30, | For the 3 months period ended September 30, | For the year ended December 31 | ||||||||||||||||||
2013 | *) 2012 | 2013 | *) 2012 | *) 2012 | ||||||||||||||||
Unaudited | Audited | |||||||||||||||||||
In thousands (except per share data) | ||||||||||||||||||||
Revenues from Proprietary Products | $ | 32,023 | $ | 30,532 | $ | 12,066 | $ | 11,030 | $ | 46,445 | ||||||||||
Revenues from Distribution | 14,168 | 20,500 | 5,414 | 6,648 | 26,230 | |||||||||||||||
Total revenues | 46,191 | 51,032 | 17,480 | 17,678 | 72,675 | |||||||||||||||
Cost of revenues from Proprietary Products | 16,516 | *)18,323 | 6,834 | *)6,184 | 26,911 | |||||||||||||||
Cost of revenues from Distribution | 12,133 | 18,100 | 4,721 | 5,788 | 23,071 | |||||||||||||||
Total cost of revenues | 28,649 | 36,423 | 11,555 | 11,972 | 49,982 | |||||||||||||||
Gross profit | 17,542 | 14,609 | 5,925 | 5,706 | 22,693 | |||||||||||||||
Research and development expenses | 9,167 | 8,979 | 2,833 | 2,769 | 11,821 | |||||||||||||||
Selling and marketing expenses | 1,554 | 1,404 | 591 | 438 | 1,853 | |||||||||||||||
General and administrative expenses | 5,514 | 3,565 | 1,543 | 1,132 | 4,781 | |||||||||||||||
Operating income | 1,307 | 661 | 958 | 1,367 | 4,238 | |||||||||||||||
Financial income | 245 | 455 | 80 | 119 | 578 | |||||||||||||||
Income (expense) in respect of currency exchange and translation differences and derivatives | (166 | ) | (15 | ) | (96 | ) | 34 | (100 | ) | |||||||||||
Income(expense) in respect of revaluation of warrants to fair value | - | (554 | ) | - | 19 | (576 | ) | |||||||||||||
Financial expense | (2,479 | ) | (2,545 | ) | (926 | ) | (836 | ) | (3,357 | ) | ||||||||||
Income (loss) before taxes on income | (1,093 | ) | (1,998 | ) | 16 | 703 | 783 | |||||||||||||
Taxes on income (tax benefit) | 15 | 600 | (21 | ) | 600 | 523 | ||||||||||||||
Net income (loss) | (1,108 | ) | (2,598 | ) | 37 | 103 | 260 | |||||||||||||
Other Comprehensive Income (Loss) | ||||||||||||||||||||
Items that may be reclassified to profit or loss in subsequent periods: | ||||||||||||||||||||
Net gain (loss) on cash flow hedge | (44 | ) | (99 | ) | 64 | (99 | ) | 229 | ||||||||||||
Items that will not be reclassified to profit or loss in subsequent periods: | ||||||||||||||||||||
Actuarial net gain of defined benefit plans | - | - | - | - | 46 | |||||||||||||||
Total comprehensive Income (loss) | $ | (1,152 | ) | $ | (2,697 | ) | $ | 101 | $ | 4 | $ | 535 | ||||||||
Income (loss) per share attributable to equity holders of the Company: | ||||||||||||||||||||
Basic income (loss) per share | $ | (0.04 | ) | $ | (0.10 | ) | $ | 0.00 | $ | 0.00 | $ | 0.01 | ||||||||
Diluted income (loss) per share | $ | (0.04 | ) | $ | (0.10 | ) | $ | 0.00 | $ | 0.00 | $ | 0.01 |
*) Retroactive adjustment, see note 2b'.
The accompanying notes are an integral part of the consolidated financial statements
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Capital | Share Premium | Proceeds from Conversion Option | Other Capital reserves | Capital reserve due to translation to presentation currency | Capital reserve from hedges | Accumulated Deficit | Total Equity | |||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||
Balance as of January 1, 2013 | $ | 7,204 | $ | 96,874 | $ | 3,794 | $ | *) 4,473 | $ | (3,490 | ) | $ | 229 | $ | (80,691 | ) | $ | 28,393 | ||||||||||||||
Net loss | - | - | - | - | - | - | (1,108 | ) | (1,108 | ) | ||||||||||||||||||||||
Other comprehensive loss | - | - | - | - | - | (44 | ) | - | (44 | ) | ||||||||||||||||||||||
Total comprehensive loss | - | - | - | - | - | (44 | ) | (1,108 | ) | (1,152 | ) | |||||||||||||||||||||
Issuance of ordinary shares, net of issuance costs | 1,749 | 51,115 | - | - | - | - | - | 52,864 | ||||||||||||||||||||||||
Exercise of options into shares, net | 56 | 1,191 | - | (679 | ) | - | - | - | 568 | |||||||||||||||||||||||
Exercise of convertible debentures into shares | 1 | 39 | (5 | ) | - | - | - | - | 35 | |||||||||||||||||||||||
Cost of share-based payment | - | - | - | 915 | - | - | - | 915 | ||||||||||||||||||||||||
Balance as of September 30, 2013 | $ | 9,010 | $ | 149,219 | $ | 3,789 | $ | 4,709 | $ | (3,490 | ) | $ | 185 | $ | (81,799 | ) | $ | 81,623 |
Share capital | Share premium | Warrants | Conversion option in convertible debentures | Capital reserve from hedges | Other capital reserves | Capital reserve due to translation to presentation currency | Accumulated deficit | Total equity | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2012 | $ | 6,928 | $ | 91,225 | $ | 325 | $ | 3,794 | $ | - | $ | *) 4,567 | $ | (3,490 | ) | $ | *) (80,951 | ) | $ | 22,398 | ||||||||||||||||
Net loss | - | - | - | - | - | - | - | (2,598 | ) | (2,598 | ) | |||||||||||||||||||||||||
Other comprehensive loss | - | - | - | - | (99 | ) | - | - | - | (99 | ) | |||||||||||||||||||||||||
Total comprehensive loss | - | - | - | - | (99 | ) | - | - | (2,598 | ) | (2,697 | ) | ||||||||||||||||||||||||
Exercise of warrants and options into shares, net | 237 | 4,718 | (325 | ) | - | - | (895 | ) | - | - | 3,735 | |||||||||||||||||||||||||
Cost of share-based payment | - | - | - | - | - | 994 | - | - | 994 | |||||||||||||||||||||||||||
Balance as of September 30, 2012 | $ | 7,165 | $ | 95,943 | $ | - | $ | 3,794 | $ | (99 | ) | $ | *) 4,666 | $ | (3,490 | ) | $ | *) (83,549 | ) | $ | 24,430 |
*) Retroactive adjustment, see note 2b'.
The accompanying notes are an integral part of the consolidated financial statements
4
KAMADA LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Capital | Share Premium | Proceeds from Conversion Option | Other Capital reserves | Capital reserve due to translation to presentation currency | Capital reserve from hedges | Accumulated Deficit | Total Equity | |||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||
Balance as of July 1, 2013 | $ | 8,983 | $ | 148,655 | $ | 3,794 | $ | 4,762 | $ | (3,490 | ) | $ | 121 | $ | (81,836 | ) | $ | 80,989 | ||||||||||||||
Net Income | - | - | - | - | - | - | 37 | 37 | ||||||||||||||||||||||||
Other comprehensive Income | - | - | - | - | - | 64 | - | 64 | ||||||||||||||||||||||||
Total comprehensive Income | - | - | - | - | - | 64 | 37 | 101 | ||||||||||||||||||||||||
Exercise of options into shares, net | 26 | 529 | - | (319 | ) | - | - | - | 236 | |||||||||||||||||||||||
Exercise of convertible debentures into shares | 1 | 35 | (5 | ) | - | - | - | - | 31 | |||||||||||||||||||||||
Cost of share-based payment | - | - | - | 266 | - | - | - | 266 | ||||||||||||||||||||||||
Balance as of September 30, 2013 | $ | 9,010 | $ | 149,219 | $ | 3,789 | $ | 4,709 | $ | (3,490 | ) | $ | 185 | $ | (81,799 | ) | $ | 81,623 |
Share capital | Share premium | Warrants | Conversion option in convertible debentures | Capital reserve from hedges | Other capital reserves | Capital reserve due to translation to presentation currency | Accumulated deficit | Total equity | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||
Balance as of July 1, 2012 | $ | 7,015 | $ | 93,706 | $ | 325 | $ | 3,794 | $ | - | $ | *) 4,494 | $ | (3,490 | ) | $ | *) (83,652 | ) | $ | 22,192 | ||||||||||||||||
Net income | - | - | - | - | - | - | - | 103 | 103 | |||||||||||||||||||||||||||
Other comprehensive loss | - | - | - | - | (99 | ) | - | - | - | (99 | ) | |||||||||||||||||||||||||
Total comprehensive income (loss) | (99 | ) | 103 | 4 | ||||||||||||||||||||||||||||||||
Exercise of warrants and options into shares, net | 150 | 2,237 | (325 | ) | - | - | (124 | ) | - | - | 1,938 | |||||||||||||||||||||||||
Cost of share-based payment | - | - | - | - | - | 296 | - | - | 296 | |||||||||||||||||||||||||||
Balance as of September 30, 2012 | $ | 7,165 | $ | 95,943 | $ | - | $ | 3,794 | $ | (99 | ) | $ | *) 4,666 | $ | (3,490 | ) | $ | *) (83,549 | ) | $ | 24,430 |
*) Retroactive adjustment, see note 2b'.
The accompanying notes are an integral part of the consolidated financial statements
5
KAMADA LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share capital | Share premium | Warrants | Conversion option in convertible debentures | Capital reserve from hedges | Other capital reserves | Capital reserve due to translation to presentation currency | Accumulated deficit | Total equity | ||||||||||||||||||||||||||||
Audited | ||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2012 | $ | 6,928 | $ | 91,225 | $ | 325 | $ | 3,794 | $ | - | $ | *) 4,567 | $ | (3,490 | ) | $ | (80,951 | ) | $ | 22,398 | ||||||||||||||||
Net income | - | - | - | - | - | - | - | 260 | 260 | |||||||||||||||||||||||||||
Other comprehensive income | - | - | - | - | 229 | 46 | - | - | 275 | |||||||||||||||||||||||||||
Total comprehensive income | 229 | 46 | 260 | 535 | ||||||||||||||||||||||||||||||||
Exercise of warrants and options into shares, net | 276 | 5,649 | (325 | ) | - | - | (1,407 | ) | - | - | 4,193 | |||||||||||||||||||||||||
Cost of share-based payment | - | - | - | - | - | 1,267 | - | - | 1,267 | |||||||||||||||||||||||||||
Balance as of December 31, 2012 | $ | 7,204 | $ | 96,874 | $ | - | $ | 3,794 | $ | 229 | $ | *) 4,473 | $ | (3,490 | ) | $ | (80,691 | ) | $ | 28,393 |
*) Retroactive adjustment, see note 2b'.
The accompanying notes are an integral part of the consolidated financial statements
6
KAMADA LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the 9 months period ended September 30, | For the 3 months period ended September 30, | For the year ended December 31 | ||||||||||||||||||
2013 | *) 2012 | 2013 | *) 2012 | *) 2012 | ||||||||||||||||
Unaudited | Audited | |||||||||||||||||||
In thousands | ||||||||||||||||||||
Cash Flows from Operating Activities | ||||||||||||||||||||
Net income (loss) | $ | (1,108 | ) | $ | *) (2,598 | ) | $ | 37 | $ | *) 103 | $ | 260 | ||||||||
Adjustments to reconcile Net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||||||
Adjustments to profit or loss items: | ||||||||||||||||||||
Depreciation and amortization | 2,267 | 2,283 | 752 | 777 | 3,044 | |||||||||||||||
Financial expenses, net | 2,400 | 2,659 | 946 | 664 | 3,455 | |||||||||||||||
Taxes on income | 15 | 600 | (21 | ) | 600 | 523 | ||||||||||||||
Cost of share-based payment | 915 | 974 | 266 | 296 | 1,267 | |||||||||||||||
Loss (gain) from sale of property and equipment | 73 | 3 | 6 | (11 | ) | - | ||||||||||||||
Change in employee benefit liabilities, net | 148 | (148 | ) | 96 | (137 | ) | 38 | |||||||||||||
5,818 | 6,371 | 2,045 | 2,189 | 8,327 | ||||||||||||||||
Changes in asset and liability items: | ||||||||||||||||||||
Increase in trade receivables | (2,983 | ) | (6,199 | ) | (4,726 | ) | (1,856 | ) | (6,662 | ) | ||||||||||
Decrease (increase) in other accounts receivables | (1,075 | ) | (20 | ) | (1,282 | ) | (850 | ) | 451 | |||||||||||
Increase (decrease) in inventories and long-term inventories | (1,693 | ) | (3,545 | ) | 1,622 | (1,974 | ) | (4,861 | ) | |||||||||||
Decrease in deferred expenses | 156 | 102 | 128 | 63 | 89 | |||||||||||||||
Increase (decrease) in trade payables | (3,289 | ) | 299 | (111 | ) | (48 | ) | (157 | ) | |||||||||||
Increase (decrease) in other accounts payables | 646 | (61 | ) | (314 | ) | (47 | ) | 322 | ||||||||||||
Increase (decrease) in deferred revenues | (3,138 | ) | (607 | ) | (1,653 | ) | 3,428 | (3,438 | ) | |||||||||||
(11,376 | ) | (10,031 | ) | (6,336 | ) | (1,284 | ) | (14,256 | ) | |||||||||||
Cash paid and received during the period for: | ||||||||||||||||||||
Interest paid | (1,573 | ) | (1,665 | ) | (511 | ) | (525 | ) | (2,200 | ) | ||||||||||
Interest received | 411 | 574 | 216 | 144 | 249 | |||||||||||||||
Taxes paid | (97 | ) | (639 | ) | (43 | ) | (603 | ) | (642 | ) | ||||||||||
(1,259 | ) | (1,730 | ) | (338 | ) | (984 | ) | (2,593 | ) | |||||||||||
Net cash provided by (used in) operating activities | (7,925 | ) | (7,988 | ) | (4,592 | ) | 24 | (8,262 | ) |
*) Retroactively adjusted to reflect changes in the presentation currency, see note 1c'.
The accompanying notes are an integral part of the consolidated financial statements
7
KAMADA LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the 9 months period ended September 30, | For the 3 months period ended September 30, | For the year ended December 31 | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2012 | ||||||||||||||||
Unaudited | Audited | |||||||||||||||||||
In thousands | ||||||||||||||||||||
Cash Flows from Investing Activities | ||||||||||||||||||||
Short-term investments | 12,159 | (1,619 | ) | 4,311 | (3,531 | ) | 665 | |||||||||||||
Purchase of property and equipment | (4,425 | ) | (3,118 | ) | (1,678 | ) | (1,136 | ) | (4,609 | ) | ||||||||||
Proceeds from sale of equipment | 3 | - | - | - | - | |||||||||||||||
Restricted cash, net | - | 1,512 | - | - | 1,512 | |||||||||||||||
Net cash provided by (used in) investing activities | 7,737 | (3,225 | ) | 2,633 | (4,667 | ) | (2,432 | ) | ||||||||||||
Cash Flows from Financing Activities | ||||||||||||||||||||
Exercise of warrants and options into shares | 545 | 2,525 | 277 | 1,944 | 2,978 | |||||||||||||||
Proceeds from issuance of ordinary shares, net | 53,099 | - | (859 | ) | - | - | ||||||||||||||
Short term credit from bank and others, net | (6 | ) | (9 | ) | - | (3 | ) | (12 | ) | |||||||||||
Net cash provided by financing activities | 53,638 | 2,516 | (582 | ) | 1,941 | 2,966 | ||||||||||||||
Exchange differences on balances of cash and cash equivalent | 916 | (207 | ) | 370 | (106 | ) | 220 | |||||||||||||
Increase (decrease) in cash and cash equivalents | 54,366 | (8,904 | ) | (2,171 | ) | (2,808 | ) | (7,508 | ) | |||||||||||
Cash and cash equivalents at the beginning of the year | 16,866 | 24,374 | 73,403 | 18,278 | 24,374 | |||||||||||||||
Cash and cash equivalents at the end of the year | $ | 71,232 | $ | 15,470 | $ | 71,232 | $ | 15,470 | $ | 16,866 | ||||||||||
Significant non-cash transactions | ||||||||||||||||||||
Purchase of Property and equipment and intangible assets on credit | $ | - | $ | 488 | $ | - | $ | - | $ | - | ||||||||||
Exercise of options presented as liability | $ | 23 | $ | 1,209 | $ | - | $ | - | $ | 1,215 | ||||||||||
Issuance expenses accrued in other accounts payable | $ | 235 | $ | - | $ | - | $ | - | $ | - | ||||||||||
Exercise of convertible debentures into shares | $ | 35 | $ | - | $ | 35 | $ | - | $ | - |
*) Retroactive adjustment, see note 2b'.
The accompanying notes are an integral part of the consolidated financial statements
8
NOTE 1:- | GENERAL |
These Financial Statements have been prepared in a condensed format as of September 30, 2013 and for the three months then ended ("interim consolidated financial statements"). |
These financial statements should be read in conjunction with the Company's annual financial statements as of December 31, 2012 and for the year then ended and the accompanying notes ("annual consolidated financial statements") as included in the Prospectus of Kamada Ltd., dated May 30, 2013. |
NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES |
a. | Basis of preparation of the interim consolidated financial statements: |
The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in IAS 34, "Interim Financial Reporting". |
b. | New standards, interpretations and corrections first applied by the Company |
The accounting policies applied in preparing the interim consolidated financial statements consistent to those applied in the preparation of the annual consolidated financial statements, except for the following: |
1. IAS 19 (revised) - Employee Benefits |
In June 2011, the IASB issued IAS 19 (Revised) to be applied from January 1, 2013. The main changes in the standard that are applicable to the Company are as follows: |
- The "corridor" approach which allowed the deferral of actuarial gains or losses has been eliminated. |
- The return on the plan assets is recognized in profit or loss based on the discount rate used to measure the employee benefit liabilities, regardless of the actual composition of the investment portfolio. |
- The distinction between short term employee benefits and long term employee benefits will be based on the expected settlement date and not on the date on which the employee first becomes entitled to the benefits. |
From January 1, 2013, the Company changed its accounting policy and began to apply IAS 19 (revised). Changes have been made retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, and therefore restated financial information of prior periods. |
The effects of change in accounting policy resulting from the initial implementation of the revised IAS 19 on the financial statements are as follows: decrease in the other capital reserves as of January 1, 2012 and December 31, 2012 in the amount of $187 and $141 thousands, respectively. The Employee benefit liabilities, net for the same dates increased in the same amount. Other Comprehensive Income for the year ended December 31, 2012 increased in the amount of $46 thousands. |
9
KAMADA LTD.
NOTES TO FIANCIAL STATEMENTS
Note 2: - | Significant Accounting Policies (cont.) |
IFRS 13, Fair value measurement |
IFRS 13 establishes guidance for the measurement of fair value, to the extent that such measurement is required according to IFRS. IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. IFRS 13 also specifies the characteristics of market participants and determines that fair value is based on the assumptions that would have been used by market participants. According to IFRS 13, fair value measurement is based on the assumption that the transaction will take place in the asset's or the liability's principal market, or in the absence of a principal market, in the most advantageous market. The new disclosures are to be applied prospectively beginning on January 1, 2013, and they do not apply to comparative figures. |
The adoption of IFRS 13 did not have a material effect on the Company's financial statements. It should be noted that the new disclosures required for financial instruments was not included in this interim financial statements since the differences from the information presented in the annual financial statements as of December 31, 2012 are immaterial. |
NOTE 3:- | Operating Segments |
a. | General: |
The company has two operating segments, as follows: |
Proprietary Products | Medicine development, manufacture and sale of plasma-derived therapeutics products. |
Distribution | Distribution of drugs in Israel manufacture by other companies for clinical uses, most of which are produced from plasma or its derivatives products. |
b. | Reporting on operating segments: |
Proprietary Products | Distribution | Total | ||||||||||
In thousands | ||||||||||||
Unaudited | ||||||||||||
Nine months period Ended September 30, 2013 | ||||||||||||
Revenues | 32,023 | 14,168 | 46,191 | |||||||||
Gross profit | 15,507 | 2,035 | 17,542 | |||||||||
Unallocated corporate expenses | (16,235 | ) | ||||||||||
Financial expenses, net | (2,400 | ) | ||||||||||
Loss before taxes on income | (1,093 | ) |
10
KAMADA LTD.
NOTES TO FIANCIAL STATEMENTS
NOTE 3:- | Operating Segment Reporting (Cont.) |
Proprietary Products | Distribution | Total | ||||||||||
Unaudited | ||||||||||||
Nine months period ended September 30, 2012 | ||||||||||||
Revenues | $ | 30,532 | $ | 20,500 | $ | 51,032 | ||||||
Gross profit | $ | 12,209 | $ | 2,400 | 14,609 | |||||||
Unallocated corporate expenses | (13,948 | ) | ||||||||||
Financial expenses, net | (2,659 | ) | ||||||||||
Loss before taxes on income | $ | (1,998 | ) |
Proprietary Products | Distribution | Total | ||||||||||
Unaudited | ||||||||||||
Three months period Ended September 30,2013 | ||||||||||||
Revenues | 12,066 | 5,414 | 17,480 | |||||||||
Gross profit | 5,232 | 693 | 5,925 | |||||||||
Unallocated corporate expenses | (4,967 | ) | ||||||||||
Financial expenses, net | (942 | ) | ||||||||||
Income before taxes on income | 16 |
Proprietary Products | Distribution | Total | ||||||||||
Unaudited | ||||||||||||
Three months period Ended September 30,2012 | ||||||||||||
Revenues | $ | 11,030 | $ | 6,648 | $ | 17,678 | ||||||
Gross profit | $ | 4,846 | $ | 860 | 5,706 | |||||||
Unallocated corporate expenses | (4,339 | ) | ||||||||||
Financial expenses, net | (664 | ) | ||||||||||
Income before taxes on income | $ | 703 |
Proprietary Products | Distribution | Total | ||||||||||
Unaudited | ||||||||||||
Year Ended December 31, 2012 | ||||||||||||
Revenues | $ | 46,445 | $ | 26,230 | $ | 72,675 | ||||||
Gross profit | $ | 19,534 | $ | 3,159 | 22,693 | |||||||
Unallocated corporate expenses | (18,455 | ) | ||||||||||
Financial expenses, net | (3,455 | ) | ||||||||||
Income before taxes on income | $ | 783 |
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KAMADA LTD.
NOTES TO FIANCIAL STATEMENTS
Note 4:- | Significant events during the period |
a. | During the period employees and investors exercised 233,711 options into 189,289 ordinary shares of NIS 1 par value each for a total consideration of $545 thousand. |
b. | In the recent past, the Company has undertaken certain activities to increase the production capacity of its manufacturing facility in Beit Kama. A request for approval of these adjustments from the FDA was filed. In March 2013 the FDA responded to this request by requesting additional data prior to its approval of the new manufacturing process. The Company intends to respond to the FDA’s additional data request during the second half of 2013 and the Company will continue to use its existing production process in the interim and not distribute any inventory produced by the new process until a FDA approval for the new processes is received. The Company believes that it is probable that approval by the FDA of the new manufacturing process will be obtained during the first half of 2014. The Company is periodically reassessing the probability to obtain the FDA approval and shelf life of such inventory, to determine whether the net realizable value is lower than cost. As of September 30, 2013, the Company had inventories produced under the new process in the amount of $10.9 million. |
c. | On April 9, 2013, the Company's board of directors modified certain terms of the non-marketable options granted to the Company CEO on December 11, 2012, by increasing the number of options granted from 120,000 to 150,000 and by changing the exercise price to NIS 41.47. All the other option terms remain the same. On May 26, 2013 ("the Grant Date"), the Company's general shareholders meeting approved the grant of the options to the Company's CEO. |
The following table lists the data used in measuring fair value as of May 26, 2013 for the above options: |
Dividend yield (%) | - | |
Expected volatility of the share prices (%) | 29-53 | |
Risk-free interest rate (%) | 1.35 – 3.06 | |
Contractual life of share options (years) | 6.5 | |
Share price (NIS) | 40.03 | |
Expected average forfeiture rate (%) | 0 |
The fair value of the options was estimated at $ 625 thousands according a calculation formula based on the Binominal Model. The Company will recognize expenses over the service period (for further details refer to note 22(b) in the annual consolidated financial statements). As of September 30, 2013 the Company recorded expenses in the amount of $ 215 thousands. |
d. | On April 14, 2013 the general shareholders meeting approved the increase of authorized ordinary shares to 70,000,000 ordinary Shares. |
e. | On May 14, 2013, the Company and Baxter amended the license agreement and the distribution agreement (see note 19(a) in the annual report) to extend the period of minimum purchases of Glassia to six years until 2016 and to increase the minimum purchases under the distribution agreement to $84 million (not including royalty payments under the license agreement which are expected beginning of 2017) from $60 million over the first five years commencing with the signing of the distribution agreement. |
12
KAMADA LTD.
NOTES TO FIANCIAL STATEMENTS
Note 4:- | Significant events during the period (Cont.) |
In addition, the Company completed during the second quarter of 2013 an additional milestone under the amended license agreement related to the transfer of technology to Baxter. The Company received payment of $4.5 million which was recognized as revenues during the period. |
f. | On May 30, 2013 the Company completed its initial public offering on the NASDAQ ("the IPO") of 5,582,636 shares at $9.25 per share. On June 4, 2013 the underwriters exercised the right to purchase an additional 837,395 ordinary shares to cover over-allotments at the same price per share. The Company's total proceeds from the issuance of the above shares were $53,099 thousands, net of issuance expenses. In addition, the Company incurred $ 1,400 thousands of one-time management compensation expense related to the IPO included in the statement of comprehensive income under general and administrative expenses. |
g. | On July 30, 2013, the Israeli Parliament (the Knesset) approved the second and third readings of the Economic Plan for 2013-2014 ("Amended Budget Law") which consists, among others, of fiscal changes whose main aim is to enhance the collection of taxes in those years. |
These changes include, among others, raising the Israeli corporate tax rate from 25% to 26.5%, cancelling the lowering of the tax rates applicable to preferred enterprises (9% in development area A and 16% in other areas) and in certain cases increasing the tax rates on dividends within the scope of the Law for the Encouragement of Capital Investments to 20% effective from January 1, 2014. Other changes introduced by the Amended Budget Law include taxing revaluation gains effective from August 1, 2013. The provisions of the changes regarding the taxation of revaluation gains, however, will only become effective once regulations that define "non-corporate taxable retained earnings" are issued as well as regulations that set forth provisions for avoiding double taxation of assets outside of Israel. As of the date of publication of these interim financial statements, no such regulations have been issued. |
The deferred tax balances included in the financial statements as of September 30, 2013 are calculated according to the new tax rates that were substantially enacted as of the balance sheet date and therefore comply with the above changes, as applicable to the Company. |
The abovementioned changes did not have a material effect on the Company's financial statements. |
Note 5:- | Subsequent events |
Since October 1, 2013 and until October 27, 2013, an amount of NIS 16,572,854 par value of the convertible debentures was converted to 446,467 ordinary shares of NIS 1 par value each. |
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